Shergeran Naidoo, the head of stakeholder engagements at BankservAfrica, said there was a slower, but positive increase for take-home pay in September.
“The BankservAfrica data reveals that there have been minimal increases to the average take-home pay since September 2013 - providing a strong indication of the struggling economy in the last five years,” Naidoo said.
The data revealed that since September 2013, the average take-home pay increased by a modest 2.8percent above the change in inflation.
The data further found that overall nominal take-home pay increased by 45.3percent, while personal tax collections increased by 70.6percent since August 2013 to August 2018.
Personal income tax (PIT) is the single largest source of tax revenue by some margin. “PIT is the most stable and predictable of the main sources of tax revenues and it is expected that the National Treasury will largely maintain its forecast in this regard in the Medium Term Budget Policy Statement,” said Kyle Mandy, a tax policy leader at PricewaterhouseCoopers.
When looking at September’s data, the index showed that the average banked take-home pay was R15299 in September in nominal terms and in real terms, the average take-home pay was R14256.
“Take-home pay increased in real terms for most of 2018 and we expect this to continue until year-end. However, 2019 could bring some change as inflation is expected to increase along with the continued poor growth performance of the South African economy,” said Mike Schüssler, the chief economist at Economists.co.za.
While the steady increase of real take-home pay was expected to play a positive role in the ability of consumers to spend, other data pointed to subdued consumer spending.
The Intelligent Debt Management (IDM) Group, which comprises DebtBusters and Consumer Debt Help, said it had noticed an increase in inquiries for debt assistance over the past three months. The firm found that as of September, debt management inquiries were up 20percent from the comparative period last year.
Ian Wason, the chief executive of IDM Group, said it was expected that consumers would be tightening their belts a lot sooner than usual due to the increased economic and financial hurdles faced by South Africans this year.