Despite rising employment levels, the average take-home pay of South Africans dropped in January 2023, as load-shedding and rising costs are putting pressure on businesses.
The BankservAfrica Take-home Pay Index (BTPI) showed average nominal take-home pay in January was R14,305. It is a small decrease from the R14,684 average recorded in December 2022.
However, this is a 7.5% decrease from the R15,467 average recorded in January 2022.
This decrease can primarily be attributed to companies buckling under the pressure of load-shedding and rising costs.
“The constant load-shedding, high production costs due to high fuel prices and rising wage demands, as well as elevated interest rates and moderating demand, are all contributing to the dismal growth prospects faced by companies,” said BankServ Africa.
This decrease comes despite an increase in employment levels in 2022.
“Adjusted for weekly payments, BankservAfrica’s data suggests that 606,500 fewer salaries were paid into South Africans’ bank accounts in January 2023 compared to the previous month,” said economist Elize Kruger.
It is likely a reversal of temporary jobs created at the end of 2022 for the festive season.
“With little indication of a notably different economic environment in 2023, the job market is likely to remain strained, as the main economic challenges prevail,” said Kruger.
A little hope was provided in the 2023 budget, as no major tax changes were announced, and the finance minister provided tax relief for “bracket creep”.
This refers to an employee paying higher tax following an inflation-related salary increase, thereby ending up worse off after tax.
The solar incentives available to households and businesses in the budget should also provide some relief.