South African salaries plummet in USD
South African salaries have not kept up with inflation over the last five years, meaning South Africans are poorer in real terms. This value erosion in dollar terms is even worse.
BankservAfrica’s Five-year Review of Take-home Pay and Private Pensions in South Africa measured salaries in South Africa from February 2018 to February 2023.
Daily Investor analysed data from this review to express South Africa’s salaries in dollar terms to factor in the depreciation of the local currency.
This shows that the global purchasing power of a South African salary has markedly declined over the last five years.
The average nominal salary increased over the last five years by 22.8% – from R12,573 to R15,438. However, inflation over the period was 26.6%.
This means the average salary in South Africa in 2023 is worth 3.8% less in real terms than the average salary in 2018.
Salaries in South Africa matched inflation from 2018 to 2021. However, a spike in inflation in 2022 saw it outstrip salary increases.
South African salaries in dollar terms
The average take-home pay in South Africa was $1,066.57 in 2018. While salaries have increased in rand terms, they have markedly declined in dollar terms, with the average take-home salary in 2023 being only $841.37.
The years where the dollar-rand exchange rate was relatively stable, from February 2020 to February 2022, saw South Africa’s global purchasing power increase.
However, the severe depreciation of the rand in the second half of 2022 and the beginning of 2023 has decimated the average South African salary’s value globally.
The chart below shows the value of the average South African take-home salary in dollar terms from 2018 to 2023.