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Cape Town - South Africans had every reason to smile last month as real take-home pay reached a 15-month high after it increased for the fourth consecutive month by 1.3 percent.

BankservAfrica’s monthly data showed slower inflation was contributing to rise in real-home wages.

The BankservAfrica disposable salary index (BDSI) - the country’s fastest and most frequent measure of salaries - indicated slower inflation increases and faster nominal wage growth helped formal sector wage earners gain higher real increases.

As such, formal sector workers paid via the South African payments system are better off than a year ago.

Seasonally adjusted real take-home pay averaged R13894 last month, slightly higher than May’s average of R13802.

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With most of the last two years showing declines in real take-home pay, as seen in the BDSI, the last four months point to a strong likelihood of a change in the downward trend as inflation falls and salaries are adjusted accordingly.

Past rates

Formal sector real salary increases are recording improved increases on average as they are based on past inflation rates.

Interestingly, the median or typical disposable salary increased in real terms last month, and for five consecutive months. The real increase of 3.4 percent last month is the highest for median salaries in 30 months.

Despite personal income tax brackets not being fully adjusted for inflation for the last decade and medical insurance payments increases being about 3 percent higher than inflation, the * umber of employees taking home more than R10 000 a month in nominal terms has increased from 33.8 percent in January 2012 to 52.6 percent.

It, therefore, appears that take-home pay is increasing faster for lower salary levels.

The BDSI does not take into account the monthly take-home salaries that are more than R10 0000.

While consumer confidence is at very low levels in the economy, real salaries for the majority of the formal sector employees have increased.

BUSINESS REPORT ONLINE