there were an estimated 235 000 temporary salary payments made to contracted workers during the May elections.     Ayanda Ndamane African News Agency (ANA)
there were an estimated 235 000 temporary salary payments made to contracted workers during the May elections. Ayanda Ndamane African News Agency (ANA)

Elections a boost for take-home pay index

By Joseph Booysen Time of article published Jul 26, 2019

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A major contributing factor to South African take-home pay for last month, seeing a slight increase, was this year’s national elections in May.

This is according to the latest BankservAfrica Take-home Pay Index, which saw take-home pay reach its highest peak in 10 months last month, beating inflation for the third time.

According to BankservAfrica, this means that the likelihood of inflation remaining at low levels brings further good news for the short term by helping employees to stretch their earnings in the forthcoming months. However, more improvement is needed for real change to the economy.

Shergeran Naidoo, head of stakeholder engagements at BankservAfrica, said take-home pay for June increased in real-terms by 2 percent year-on-year.

Naidoo said that a major contributing factor to this increase was this year’s national elections in May, where there were an estimated 235000 temporary salary payments made to contracted workers.

He said overall total payments in nominal terms increased by moreo than 6percent last month, arresting the slowdown in total nominal payments made over the last 10 months.

“Again, this is owed to the temporary payment to staff who were contracted during the elections. Many were government employees and a substantial number were previously unemployed, or did not have regular formal income.

“As such, the overall take-home pay increased, which the BankservAfrica index made allowance for in the average take-home pay numbers and percentage change numbers.

“The real seasonally adjusted take-home pay for June was R13890. In today’s money, this was R15270,” said Naidoo.

He said a 6.5percent nominal year-on-year improvement was also recorded.

Mike Schüssler, chief economist at, said the annual positive change was because of the late government wage increase last year.

Schüssler said that although negotiations ended in June, the new salaries were only paid in July and August.

“The lagging change from a year ago is the reason for June’s increase. These could give a boost to consumer spending.

“The very fact that the banked wage income is rising points to a temporary growth in consumer spending for June, and most likely in July as well,” said Schüssler.

He said although the change in total payments of salary and pension income is a welcome relief, this on its own is not enough to give a longer term lift to the economy but it will ease business and consumer conditions in the near-term.

“With only electricity and water likely to be big pressure points for inflation in the short term, inflation will hopefully stay below 5percent in the medium term. This may help employees stretch their earnings in the next few months,” said Schüssler.

Naidoo said the BankservAfrica Private Pensions Index showed a 5.6 percent increase last month, the highest since February last year, to reach an average of R7390.

Naidoo said that without taking inflation into account, the average seasonally adjusted banked pension was R8600 last month.

Schüssler said June also represents the third consecutive month where private pensions increased by over 5 percent on a year-on-year basis in real terms and it is also the 28th consecutive month of real positive increases for pensions that equal the record set between August 2014 and November 2016.

The number of pensions, retirement annuity or private pensions paid into the South African National Payments System was estimated to be 709000, while there are about one million private pensions. 


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