How much more government employees earn than the private sector

Government employees are better paid than their private sector counterparts, with the median public sector salary being R46,000 per month while the private sector’s is R26,000. 

This was revealed by labour analyst Andrew Levy, who told Newzroom Afrika that better remuneration for public sector employees has not resulted in better productivity. 

Levy said that the increases received by the public sector, without a corresponding increase in productivity, are unsustainable over the long term. 

“I do not think there would be a debate if they were more efficient and the government was able to increase its efficiency in step with the salary increases.”

According to the data Levy has collected, the median salary of a government employee is R46,000 per month, while the median salary in the private sector is only R26,000 per month. 

In other words, 50% of government employees earn more than R46,000 per month. 

This data also excludes the substantial benefits public sector workers receive compared to their private sector counterparts. 

At the high end of the private sector, however, it is clear that CEOs of large, listed companies earn far more than government ministers, director-generals, or even the President. 

While this is true, Levy said that CEOs deserve to be paid more because a large part of their remuneration is classified as risk remuneration. 

This refers to the significant bonuses and incentives CEOs receive based on their performance – if they do not perform well, they do not receive that remuneration. 

“My view is that CEOs deserve their bonuses. They worked for them and probably resulted in the company thriving, employing more people and keeping others employed,” Levy said. 

On the other hand, in the public sector, employee remuneration is not based on performance and is solely determined by the increase negotiated by trade unions. 

This has made the public sector labour force highly inflexible and inefficient.

Millionaire government employees

In the Medium-Term Budget Policy Statement, the National Treasury revealed that the number of government employees earning over R1 million per year has risen from 10,000 in 2013/14 to over 55,000 in 2023/24. 

Almost half of all 1.3 million employees will earn above R350,000 per year. 

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. 

Godongwana 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 for a 4.5% raise. 

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

Government departments must 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.