SALARIES and private pensions performed slightly better last year than in the previous year as the average nominal take-home pay among approximately four million salary earners in South Africa lifted, according to the BankservAfrica Take-home Pay Index (BTPI).
The index tracks the average nominal take-home pay among approximately four million salary earners in this country.
Shergeran Naidoo, BankservAfrica’s head of stakeholder engagements, said the average nominal take-home pay was 5.6% higher at R15 409 in December last year compared to the R14 596 recorded in December 2022.
However, the average nominal take-home pay last year was only slightly better than the averages noted in 2022 and 2021, suggesting a sideways movement over the past three years.
With inflation on the rise during this period, salary earners were said to have been worse off in real terms for the third consecutive year.
Elize Kruger, an independent economist, said this pressure on disposable income was evident in the dwindling retail sales growth, with real growth for the 11 months to November last year at 1.5% lower than the previous year, while passenger car sales had also contracted last year.
The BankservAfrica data confirmed that ongoing economic challenges have hampered companies’ ability to pay inflation-related salary increases over the past 18-24 months.
Significant increases in the operating cost environment, partly due to the impact of load shedding as well as global factors, have taken a toll on companies’ profits.
After declining for three consecutive months, annual growth in the average real take-home pay was flat in December last year.
The real take-home pay at R13 732 in December last year was slightly higher than in November.
For the year, average real take-home pay dropped by 4.7% compared to 2022, suggesting significant ongoing erosion in the purchasing power of salary earners.
With international oil prices and the rand exchange rate expected to be stable on an annual average basis in 2024 – and food price inflation forecast to moderate further – consumer inflation was expected to average around 5.2% compared to 6.0% last year.
Lower inflation, with a possibility of lower interest rates later in the year, could provide much-needed support to households, with regard to spending ability and confidence levels this year.
StatsSA’s latest Labour Force Survey (LFS) confirmed the indications from BankservAfrica’s sample, which represents about 25% of the broad labour market.
According to the LFS, 399 000 jobs were created in the third quarter of last year, while the official unemployment rate moderated to 31.9%, down from 32.9% a year earlier.
Adjusted for weekly payments, BankservAfrica’s sample signalled that 430 000 more salaries were paid in the last quarter, which should see the unemployment rate moderating further.
The BankservAfrica Private Pensions Index (BPPI) slipped marginally in nominal and real terms in the last five months of last year but remained in positive territory on an annual basis.
The average nominal private pension fell slightly to R10 606 in December compared to the previous month’s R10 647. However, this was still a healthy 5.7% higher than a year earlier.
In 2023, the average private pension of R10 657 was 6.8% higher on a year-on-year basis, signalling the purchasing power of pensioners represented in the BankservAfrica database had endured even in the high inflation environment.
Similarly, in real terms, the average BPPI increased by 0.8% in the last year.
The value of total take-home pay and private pension payments processed by BankservAfrica in December last year increased by 6.0% and 0.8% in nominal and real terms, respectively, compared to a year earlier on a non-seasonally adjusted and smoothed basis.
According to recent Paylab data, the salary range of employees working in South Africa is, by default, in the range of R11 177.00 ZAR (low salaries, employees’ actual wages may be even lower) to R43 880.00 (high salaries, actual salaries can be even higher).