Wednesday, September 12, 2018

Here’s the average take-home pay in South Africa right now

South Africa’s take-home pay for July reflected a 0.3% real month-on-month improvement due to salary adjustments and back payments for public servants, according to BankservAfrica’s monthly Take-home Pay Index in July.
Meanwhile, BankservAfrica’s Private Pensions Index (BPPI) showed average increases at its strongest levels since 2012.
The public services’ salary agreement with government together with the increases arising from the back payments on April 1, 2018 both had a positive impact on take-home pay.
“Real take-home pay reached R14,076 in July from R13,611 in June,” said Shergeran Naidoo, head of stakeholder engagements at BankservAfrica. “This means that the average take-home pay reached R14,828 in nominal terms at the end of July 2018.”
“The increase to take-home pay comes in spite of the fact that inflation jumped from 4.6% in June to 5.1% in July,” said Mike Schüssler, chief economist at Economists dot coza, adding that, should inflation stay below the 5.5% mark, take-home pay will remain above inflation for a while – even if other sectors of the economy are not getting more than 5.5%.
These increases should help retail sales recover a little, but also could lead to the higher importation of consumer goods, he said.
The BankservAfrica Take-home Pay Index uses a three month moving average and considers the lagged pay increases from other employers, which affects the movement of the overall index.
This includes municipal employees who received a 7% increase, which will be implemented in August with increases backdated to 1 July 2018.
Municipal workers earning less than R9,000 at municipalities will also get an additional 0.5% increase in October 2018. This also extends to Eskom’s recent settlement for a 7.5% increase, some of which will be back paid.
Moreover, one-time bonuses of R10,000 will also be paid to the 38,000 bargaining unit employees. With the mining sector also negotiating at around 6%, it looks likely that some delayed increases will still impact the BankservAfrica Take-home Pay Index, which tracks formal sector take-home pay, the group said.
According to Schüssler, the average take-home pay in the formal sector should remain above the inflation level for the next few months.
Although the average month equivalent of the number of employees has remained over three million on a three month moving average for 40 months, there does seems to be a declining trend as four out of the last five months have seen decreases in the number of employees, he said.
“While the BankservAfrica system is not able to measure employment gains and losses, it does appear that some reduction in employee numbers may be taking place.”
“It appears the declines in take-home pay…led retail slumps, while increases in take-home pay have had a more immediate impact. This may be due to consumers not wanting to lower their lifestyles but upgrading their lives as soon as there is money in the bank,” Schüssler said.

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