South Africans poorer than a year ago

South Africans’ average nominal take-home pay in April 2023 was around 4% less than it was in April 2022.

This is according to BankservAfrica’s monthly Take-Home Pay Index (BTPI) which showed take-home pay dipped below last year’s levels in April.

“The average nominal take-home pay was R14,534, showing a sizeable decline on the R15,170 recorded a year ago,” said BankservAfrica’s head of stakeholder engagements Shergeran Naidoo.

The index also recorded a fall in the number of salary payments. 

These decreases can be attributed to the country’s overall dismal economic environment and a resultant troubled job market.

“As companies come under strain from harsh load-shedding, high production costs, rising interest rates and moderating demand, the environment remains unfavourable for comfortable wage increases or job creation,” said Naidoo.

“Organisations will likely remain in ‘survival model’ for an extended period of time.”

Independent economist Elize Kruger said the BTPI has also declined in real terms as inflation remains at elevated levels, further eroding the purchasing power of average salaries. 

In real terms, the average salary was R13,524, declining by a notable 10.4% from a year earlier.

This decrease comes despite April’s headline inflation lowering to 6.8% year-on-year and forecasts suggesting prices could moderate faster in the coming months.

However, the recent weakening of the rand could throw a spanner in the works if it remains at current weaker levels for a prolonged period. 

After two consecutive months of moderate increases in the number of salaries paid into South Africans’ bank accounts, BankservAfrica’s data – adjusted for weekly payments – suggests more than half of these gains were reversed in April, with 123,000 fewer salaries paid.

“The South African job market is still recovering from heavy job losses incurred from the impact of the Covid-19 pandemic, a challenge amid the low growth reality in South Africa,” said Kruger. 

“With little indication of a different economic environment in 2023 but an even lower economic growth forecast for 2023 compared to 2022, the job market – and salary adjustments – are likely to remain lacklustre for the remainder of the year. This is a scenario that could only exacerbate the unemployment crisis.” 

However, average private pensions, measured in the BankservAfrica Payments Pensions Index (BPPI), continued to reflect good growth.

“In nominal terms, the average private pension at R10,305 showed a monthly improvement and a 6.4% year-on-year growth,” said Naidoo. 

The real average private pension was R9,401 in April, marginally lower compared to a year earlier but still signalling that the purchasing power of pensioners has been preserved amid a high inflation environment.