The average government employee earns R465,000 a year

The average government employee earns R465,000 a year. Public sector salaries increased by 7.2% yearly from R147,000 in 2008 to R465,000 in 2022.

This was revealed in the National Treasury’s Macroeconomic Policy Review, released following the Finance Minister’s Budget Speech last week. 

The review focussed on the effect of the government’s fiscal policy over the last 15 years, from the 2008/09 financial year to the 2021/22 year. 

Over the period under review, personnel establishments in most government functions have been static at about 1.25 million people. 

However, the average remuneration rose 7.2% annually from R147,000 in 2008/09 to R465,000 in 2021/22. 

Overall, compensation spending grew faster than non‐compensation spending between 2008/09 and 2019/20.

This relationship was reversed in 2020 when the government took the unprecedented step of refusing to implement the third year of the three‐year wage agreement signed in 2018.

This is shown in the graphs below, which detail the sharp growth of government employee compensation compared to spending that excludes public servant remuneration.

In recent years, the government has tried to slow the growth of the Public Sector Wage Bill, which includes the compensation of national, provincial, and local government employees. 

It also includes the wages of employees at public entities and state-owned enterprises. 

Over the past decade, the wage bill has declined from 35.7% to 32.1% as a share of government spending.

However, in absolute terms, the government employee wage bill has skyrocketed from R408 billion in 2013/2014 to R724 billion in 2023/2024. 

The Finance Minister announced that he would honour the public sector wage deal struck in March to give employees a 7.5% increase, though it had only budgeted a 4.5% raise. 

The deal will come at an additional cost to the Treasury of R23.6 billion, Godongwana said.

Government departments will have to find the remaining R10.1 billion through reprioritisation of budgeted funds.

Over time, a higher proportion of government employees have moved into higher-earning categories due to the higher cost-of-living adjustment agreed to in wage negotiations. 

The number of employees with annual earnings over R1 million per year has also increased from just above 10,000 in 2013/2014 to over 55,000 in 2023/2024. 

Almost half of all government employees will earn over R350,000 per year.