Here’s what the average worker takes home after tax revenue

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Take-home pay tracked in the BankservAfrica Take-home Index (BTPI) showed a slight recovery in February 2023. The latest data on the number of salaries paid during the month also suggests that the local labor market is stabilizing.

“Average nominal take-home pay rose to R15,186 in February, reaching the highest level since October 2022. However, it remains 1.8% below the R15,469 measured a year ago,” said Shergeran Naidoo, Head of Stakeholder Engagements at BankservAfrica. .

In real terms, however, South Africans’ incomes fell, with inflation having a significant impact.

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BankservAfrica data confirms the negative impact of inflation on salaries, with average real net wages declining 8.3% y/y in February 2023 to R14,225, compared to a year earlier (R15,510).

This reality has trickled down to lower household consumption spending and a notable decline in confidence, as reported in the recent FNB/BER Consumer Confidence Index (CCI), which fell to -23 index points in the first quarter of 2023, pointing to the consumer concerns about South Africa’s economic outlook and their household finances.

The economic environment remains difficult for many companies challenged by heavy tax cuts, high production costs, high interest rates and declining demand, all of which contribute to dismal growth.

However, the latest data from BankservAfrica suggests that the job market has stabilized, Naidoo said.

After two consecutive months of notable declines in the number of salaries deposited into South Africans’ bank accounts, BankservAfrica data – adjusted for weekly payments – suggests some job creation in February.

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Independent economist Elize Kruger said that, while not much, any stability in the labor market is welcome in a challenging economic environment.

“The labor market is still recovering from the heavy losses caused by the impact of the Covid-19 pandemic,” she said.

According to the December 2022 Quarterly Employment Statistics report, employment in the nonfarm business sector was 9.968 million at the end of 2022, compared to the pre-Covid level of 10.3 million in the first quarter of 2020.

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The labor market is clearly still catching up, which remains a challenge amid South Africa’s low growth, she said.

“With little indication of a markedly different economic climate in 2023, but rather even lower economic growth forecast for 2023 compared to 2022, the labor market is likely to remain lackluster.

“Furthermore, consumer inflation is moderating quite slowly, resulting in a continued erosion of household purchasing power,” Kruger said.

Consumer inflation reached a 13-year high of 6.9% in 2022 (2009: 7.1%) and is expected to average around 5.8% in 2023. However, headline and core inflation in February surprised on the upside and ticked higher to 7.0% yoy. /y and 5.2% y/y, respectively.

The BankservAfrica Private Pensions Index (BPPI) remained stable in nominal terms compared to the previous month at R10,054, up 6.2% from a year earlier, and slightly above its monthly average in 2022, which was R9,985, according to Naidoo.

In real terms, the average real private pension was R9,473 in February 2023, slightly lower compared to a year earlier, indicating that pensioners’ purchasing power has largely been preserved amid high inflation.

The average nominal pension benefit represents 66.2% of the average net salary in February 2023.

Read: This is the average salary in South Africa right now

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