Salaries in South Africa have been negatively hit over the last five years.

A new BankservAfrica report shows that, since 2018, a challenging economic environment, including the high unemployment rate, soaring inflation, and the pandemic, has taken a severe toll on consumers.

Shergeran Naidoo, the head of stakeholder engagement at BankservAfrica, said that the take-home pay increased from R12,573 in February 2018 to R15,438 in February 2023 – representing growth of 22.8%.

However, when compared to the consumer price index at 26.6% the nominal take-home pay has lagged behind inflation, thus losing value in real terms.

Naidoo said that take-home pay kept up with inflation until 2021; however, in 2022, it took a turn for the worse as nominal average take-home pay stagnated, falling behind the rising cost of living.

“The highest average take-home pay salary was recorded in February 2022 at R15,760 per month, whereas the lowest average occurred in April 2019 at R12,446 per month,” he said.

Independent economist Elize Kruger said that over the past 18 months, the economic environment has been exceptionally challenging for companies.

The rampant load shedding, high production costs due to escalating fuel prices, a weaker currency and rising wage pressures, elevated interest rates and moderating demand have all contributed to the dismal growth, said Kruger.

“Companies have indicated a shift from potential expansion and investment to becoming less dependent on Eskom and have redirected capital earmarked for investment towards self-sufficiency,” she said.

“This conservative ‘survival’ approach is not conducive to employment growth in South Africa, and also keeps a lid on salary increases, as indicated in the BankservAfrica Take-home Pay Index’s performance in 2022”

Further illustrating bad news for salaries include BankservAfrica records that show the number of salaries paid increased by only 455,140 over the past five years.

Kruger said that with indications of an even lower economic growth forecast for 2023 compared to 2022, the economic environment would most likely remain bleak, resulting in a challenging job market and little room for salary improvements.

The economist noted that one should expect take-home pay to continue lagging in the months to come.

Economists and analysts have been warning over salaries and their decreasing value since the middle of 2022.

In June 2022, Advaita Naidoo, a managing director at recruitment firm Jack Hammer Global said that even if employees wish to keep up with inflation, pressures are varied, and margins remain compressed.

As the country’s economy has tanked further with downward revised growth expectations, companies are likely to want to play it safe and hold back on substantial increases and bonuses to keep the balance sheet stable during these uncertain times.


BankservAfrica reports that although pension payments have held up well against inflation, they are still lower than the average salary in South Africa.

According to the group, a five-year review of the BankservAfrica Private Pensions Index revealed the nominal pension payout rose from R7,001 in February 2018 to R10,054 in February 2023, reflecting an increase of 43.6%, which is markedly above the CPI measured over that period.

“The highest average nominal pension payment was recorded in July 2022 at R10,483 per month, whereas the lowest average was registered in February 2018 at R7,001 per month,” said BankservAfrica.

Kruger said that the proportion of average pension payments relative to the average take-home pay has risen from 55.7% in February 2018 to 65.1% in February 2023 – indicating that these payments have fared better than average salaries.

This may be due to the investment performance, combined with the resilience attributed to the composition of pension receivers, said Kruger.

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