Take-home pay rises in August -BankservAfrica
Share this article:
SOUTH Africa’s average take-home pay rose in nominal and real terms during August, with the average nominal salary being R15 125, however, the inflationary impact was starting to show, according to the BankservAfrica Take-home Pay Index (BTPI) monthly data.
The data, which did reflect on July’s payroll figures, also revealed a loss in thousands of salary payments for lower-paid employees.
BankservAfrica’s head of Stakeholder Engagements, Shergeran Naidoo, said the average nominal salary was R15 125 in August increasing by 8.1 percent reaching the highest level since January last year.
“In real terms, the average salary adjusted for inflation was R12 317 and reflected a year-on-year increase of 3.2 percent – the fastest increase since July 2020 amid the Covid-19 crisis.”
The difference between the real and nominal average salaries meant that inflation has, in effect, taken away R2 808 of the R15 125 nominal pay.
Economists.co.za chief economist Mike Schüssler said although August 2020 was not the best month to compare the inflationary impact on salaries due to the overall pandemic and lockdown period, it was interesting to note that August 2021’s real take-home pay was lower than any August between 2016 and 2019.
Salaries have stagnated as the take-home pay component has only kept up with inflation over the past year. Also playing a role in the figures was the fall in the number of lower-paid employees, as related in previous BTPIs.
Similar to the BTPI July figures, August reflected a substantial fall in the number of payments for casual employees.
In August, there were 115 000 casual payments on the system compared to the 140 000 in August last year.
Weekly payments decreased by 2 percent, translating into 8 000 employees losing their wages. While payments for lower salary employees decreased, the opposite was tracked for those taking home more than R7 000. Monthly payments decreased but within the monthly variance at 1.3 percent.
“The lockdown period has shown us that the salary movements are usually reflected in our data sooner than retrenchments, which feature about a month later. On this basis, we conclude that the number of salaries paid in August 2021 is a clear reflection of the payroll numbers during July when the unrest, mostly in KwaZulu-Natal and Gauteng, occurred,” said Schüssler.
The cumulative total take-home pay paid in August this year was 1.4 percent lower in real terms. This was said to be likely to reflect in consumer spending numbers, such as retail sales.
Schüssler said July and August were not the greatest months for formal employment. “We are hopeful that the previous, small but significant increasing trend that saw employment jumping back to 2 percent of previous levels will make a comeback. But the unrest in July has, for now, put a stop to that trend,” he said.
According to Naidoo, this week’s Quarterly Employment Statistics by Stats SA for the second quarter 2021, showed the salary trend and lower employment numbers were similar to the BTPI’s take-home pay and monthly salaries paid. However, Stats SA measured gross earnings unlike the BTPI, which measured net salaries after the deduction of tax, pension and other benefits.
For the tenth month in a row, private pension payments had increased by double the inflation rate.
“In August 2021, the average nominal private pension reached its highest nominal level ever at R9 345,” said Naidoo.
This could be a sign that pensioners with low savings had resorted to withdrawing their money.
As some good news, the number of pensioners had increased for the second consecutive month. The number, however, was nowhere near record levels. “The total private pensions paid was R6.1 billion in August, becoming the third consecutive month that the total pensions paid were over R6bn in the month,” said Schüssler.
BUSINESS REPORT ONLINE