Good news for South Africans earning less than R22,000 a month

​​​​From 1 April 2025, South Africa’s statutory earnings threshold will increase to R261,748.45, entitling employees falling below the new threshold to stricter protections under labour legislation.

This is according to legal experts Kate Collier, Brett Abraham, and Jamie Jacobs at Webber Wentzel.

The statutory earnings threshold will increase to R261,748.45 a year at the start of April, which translates to earnings of R21,812.37 per month.

This represents a R7,376.78 increase from the current threshold, which is R254,371.67 yearly or around R21,197.64 a month.

The threshold is a determination under section 6(3) of the Basic Conditions of Employment Act (BCEA) and affects the applicability of certain provisions of the BCEA, Labour Relations Act (LRA), and Employment Equity Act (EEA).

This earnings threshold is based on an employee’s total gross annual income before deductions like tax, UIF, medical aid, and pension contributions.

It excludes contributions made by an employer on behalf of an employee, as well as any subsistence and transport allowances, achievement awards, and payment for overtime worked.

Collier, Abraham, and Jacobs explained that the threshold is intended to ensure greater protection for more vulnerable employees earning below a specified income.

Employees earning below the threshold are entitled to certain protections that do not apply to higher earners.

Some of these protections include ordinary work hours, overtime, meal intervals, daily and weekly rest periods, Sunday pay, night work pay, and public holiday pay.

Certain employment protections, such as those for temporary and fixed-term workers under the Labour Relations Act (LRA), also do not apply to employees who earn above the threshold.

They also cannot take unfair discrimination disputes to the Commission for Conciliation, Mediation, and Arbitration (CCMA) unless the case involves sexual harassment or all parties agree to arbitration.

Instead, these disputes must go directly to the Labour Court.

However, Labourwise explained that most of the BCEA’s provisions regulating working time do not apply to senior managerial employees, even if they earn less than the threshold.

The increase in the threshold is a noteworthy development since it could expand the number of employees entitled to stricter protections under labour legislation, such as overtime pay and double pay for work on public holidays.

These benefits will apply even in cases where the employee’s contract may state that they do not qualify.

As a result, employers may face financial implications, as they may now be required to comply with additional BCEA protections for employees who now fall below the new threshold.

According to BankservAfrica’s latest Take-home Pay Index, the average take-home pay of an estimated four million employees increased to R17,202 in December 2024.

This means that most South African workers will be subject to the minimum threshold protections under the BCEA.

Collier, Abraham, and Jacobs urged employers to take note of the new threshold and understand which employees fall below it to minimise their risk of non-compliance with the BCEA.

“It is prudent for employers to review remuneration structures to account for the new threshold and its associated costs,” they said.

“Employers who utilise atypical employment arrangements should also review these arrangements to ensure ongoing compliance with the BCEA and to avoid the consequences of the deeming provisions under the LRA.”