Living on SA’s ‘average’ salary of R23 122 per month

Its value depends on how it shapes up in relation to your expenses.
Ironically those who earn more often take on higher levels of debt and end up being worse off in the long run. Image: Waldo Swiegers/Bloomberg

While accepting that averages are fraught with shortcomings, the finding that the average salary in the formal sector in South Africa has increased by R727 per month – from R22 395 in March 2020 to R23 122 in 2021 – is nevertheless interesting.

The figure comes from the latest Quarterly Employment Statistics survey recently published by Statistics SA.

Thousands of people would be very happy with a salary of R23 000 per month, while many are probably just as happy that they don’t earn only R23 000 per month – illustrating the bane of averaging income from diverse professions in different industries.

In addition, the increase in the average salary is probably more the result of the decline of 552 000 jobs in the formal economy over the past year than a real salary increase.

Read: Unemployment: No light at the end of the tunnel

However, the R23 000 is the statistical average of 6.64 million people employed in the formal non-agricultural sector, raising question about the average lifestyle in SA.


Paying tax is the first responsibility of whoever is lucky enough to still have a job.

Sidney Fletcher, senior tax consultant at Tax Consulting SA, says an individual under the age of 60 will have to pay R3 258 tax on R23 122 per month in the current tax year, leaving a net salary of just less that R20 000 per month.

“If a person’s total salary for a year is less than R500 000 from a single source without any allowance, it is subject to PAYE [pay-as-you-earn tax] and they do not have to submit a tax return.

“However, I would always advise taxpayers who were employed for a part of the year and/or made contributions to a retirement fund and medical aid that did not form part of employer’s payroll to submit a tax return,” says Fletcher.

He says employees can reduce their tax liabilities.

“The most common and risk-free method of reducing tax is to contribute to a retirement fund. Retirement fund contributions reduce your taxable income and your tax liability. Individuals who are employed and whose income is subject to PAYE will get the benefit monthly, while also having the benefit of saving for their retirement,” says Fletcher.

Contributing R1 500 to a retirement fund will reduce the tax liability by R385 per month – from R3 258 to R2 873 – but reduces the available monthly income to R18 746.

Value of income

Just below R19 000 per month after tax and a long term savings plan is still a good income for an individual, as well as for a family of two parents and two children. (Stats SA research shows that the average family has 2.6 children.)

Sebastien Alexanderson, CEO of National Debt Advisors, points out that Stats SA also found that about half of SA families are considered poor, while about 30% are considered working to middle class. He says a lot of people earn less than R8 000 per month.

“The value of your income is dependent on your expenses. The person earning R12 000 per month with no debt and limited, manageable expenses might be in the position to afford some luxury items, as well as have some money left to save each month.

“However, the person earning R25 000 per month may have huge expenses and numerous debts to service, leaving them open to not having enough money for everyday living expenses and much fewer savings.

“In our experience, it isn’t about how much you earn – but rather how your earnings relate to your everyday living expenses and your debt repayments,” says Alexanderson.

He says National Debt Advisors found that affluent households were harshly affected by Covid-19 in the past year. “If you were earning R60 000 per month with monthly living expenses and debt repayments of R55 000 per month, and your income dropped to R40 000 per month, then you got into trouble.

“It isn’t [simply] a matter of income. How much you earn is only important in terms of how much you spend,” he says, adding that if a person’s expenditure is consistently more than their income for months at a time, then they should consider professional advice.

Alexanderson says that too often people deny the reality of their situation and leave it until it’s too late to find any viable solutions.

Pierre Muller, advisory partner at Citadel, agrees that too much debt and a lack of proper financial planning is at the core of people’s money worries. He notes that people often spend too much money and make too much debt.

Instant gratification

A typical example is an expensive new car. “If one goes into debt to make a purchase, let’s assume R500 000 at 18% interest, payable over five years, your instalment is R13 200 per month.

“After five years, you’ve paid R300 000 in interest alone. Hence you paid a total of R800 000 for something that might only be worth R200 000 after five years.

“As a depreciating asset, a new car loses approximately 20% value in the first year and 15% per year thereafter.

“This is the epitome of short-term pleasure versus long-term pain,” says Muller.

“If one spends too much now and too little on the important financial elements, when calamity strikes in life there will not be enough reserves to fall back on. This often leads one into debt and starts or continues a vicious financial cycle.”

He says it is better to save up until you can at least put down a significant deposit to decrease the loan term. Suddenly, you earn interest on your savings instead of paying interest on a loan.

Muller stresses the importance of proper financial planning to secure a better financial future.


The first step is to acknowledge and take stock of your current financial status. “If you do not know where you are, you cannot navigate your way forward.

“Whether you are in debt or want to build your financial future, the best time to face the reality of your situation is today and any situation can be improved upon with a clear path and time,” says Muller.

He gives a few pointers:

  • Determine your financial goals, and be realistic.
  • Compile a list of your assets and liabilities, including any current investments and policies. Include details of the income for both you and your spouse.
  • Include your dreams or aspirations, such as owning a holiday home or buying a vintage car.
  • Consider the tax implications, if any. The advice of a financial planner cannot be stressed enough when it comes to the complex world of tax.
  • Be aware of the effects of inflation on investment values, particularly when planning for retirement.
  • Beware of the ‘Yolo’ (You Only Live Once) mindset. It also encourages younger investors to take highly concentrated risks.
  • Use a professional financial advisor to prepare a detailed analysis for you and always establish what the costs will be upfront. This advisor should be your financial coach to help you stay motivated, to persevere and reach your financial goals.
  • Beware of financial scams.
  • Get your partner or spouse involved.

“Creating a personal financial plan starts with identifying your goals. Remember that each goal needs to be achievable within the context of your lifestyle,” says Muller.

“This serves as a reality check, taking into consideration your resources. If your resources are insufficient, certain goals must be adjusted to be more realistic. Goals are usually dependent on your monthly budget.”

Advice for the average earner

The first goal for a person earning the average after-tax salary of around R20 000 per month should be to save for an emergency fund of approximately three months’ living expenses, which would cover them if they lose their jobs or another unforeseen circumstance arises, says Muller.

“It’s important to bear in mind that retirement savings are often not accessible in case of emergencies,” he adds.

“A person earning R20 000 should look at what expenses they will still have even if they have no income.

“The person might save on travel expenses to work or pension fund deductions from their employer. If they still need R16 000 per month to survive, the goal for an emergency fund should be around R48 000,” according to Muller.

Thereafter, the focus moves to investing for retirement. “It’s important not to delay this because retirement might feel far in the future, but the earlier you start, the more you will benefit from compound interest,” say Muller.

Read: Half of South Africans are unprepared for retirement

If you will be comfortable in retirement living off 75% of your pre-retirement salary, you need to save the following:

  • 17% of your salary every month if you start investing at 25 years;
  • 22% if you start investing at 30; and
  • Nearly 60% if you only start saving for your retirement start at the age of 45 years.

How best to save?

Muller says good investment options for an average single person who wants to save for an emergency fund, a new car or a holiday include tax-free investment plans.

While the maximum annual contribution is limited to R36 000 with a total limit of R500 000, the funds are accessible when required.

“When the R36 000 annual limit is reached, one can opt for a unit trust investment with similar investment options and flexibility,” says Muller, noting that fixed deposits and other cash investments are currently earning very low returns.

A couple with children

Having a spouse and kids significantly adds to the monthly living expenses, such as more life cover to look after the family if the main breadwinner dies, more dependants on the medical aid, and saving for tertiary education.

“It’s probably best for a couple to work backwards in their budget,” says Muller, “deducting all the important expenses and investments from their salary and seeing what is left for spending.”

This exercise is often a wake-up call that one needs to be careful about spending on ‘wants’ and being left with too little to save and invest, says Muller.

Covid-19 was a wake-up call

The experts Moneyweb spoke to noted that the Covid-19 pandemic forced people to look at their income, expenditure and financial future – or should have motivated them to do so.

Muller says a good financial plan creates financial security and ensures that people reach their goals.

“It gives direction and meaning to one’s financial decisions.”

Listen to Nompu Siziba’s interview with TransUnion’s Carmen Williams (or read the transcript here):



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It is deeply insulting and plain wrong to even suggest people earn close to this money. Most South Africans are actually unemployed/unemployable. And those that do have jobs earn between R5000-R11000 a month.

You only got to this number because most CEOs earn R100k-R250 a day! Not a week or month but a day! With these unjustifiable salaries it is projecting this grossly inflated number that’s no where close to reality

yup, the median salary will be a far more meaningful number and I’d venture it’s below R17k. This figure also excludes the informal sector, which covers a very sizable chunk of South Africa’s earners.

I suspect the research was done on Govt. employees only.

Exactly. Going by the numbers on the current negotiations with pubic service employees, a 1.5% increase plus R1,500 non pensionable cash bonus amounts to about 5.5% increase.

Quick math means average government salary is R40,000 per month!

Firstly, you’ve not noticed that they said right at the start “averages” aren’t a perfect indicator (more than once actually).

Secondly, are you saying a few overpaid CEOs should simply earn less and therefore everyone else more?

Far removed from the reality of the average person. Not taken into the calculations are the fact that most are also looking after elderly parents which is not only a huge responsibility but comes with huge expenses. The medical aids that are killing us for their financial gain, rocketing food prices, and one way or another we pay for the theft by the ANC Government and no better example than municipal accounts. The average person who might also be a registered homeowner is a tenant of his own property due to the municipal bills alone.

Does this average include the 7 to 10m illegal immigrants?

Train yourself & your staff with Financial Fitness Training.Get out of debt 1st!!!!!!!! FIRST GET OUT OF DEBT!! Take the credit cards out of your wallet. They hurt don’t they?????

I really enjoyed reading the article. Average is very subjective and given the huge disparity in income in SA, even more so. You have people in full time jobs earning well below R10k that can barely afford to save. Given the high unemployment rate, the prospect of those in that category, moving on to better jobs, is unlikely at this point in time.

I am in retirement (Retirement funds still intact and living off savings for now), and fortunately debt free, but with cost of living not discriminating, spare a thought for those that are well below the average. Medical expenses in retirement is the killer.

Unfortunately no mention is made of hidden taxes in the form of private services such as medical aid, security, education, etc, due to the failing governance of the country. Just medical aid and security could cost an average family of 5 about 31% of the R19k.

…very well described! “…hidden taxes…”

Private medical, security and education are luxury items for the rich, so it does not make sense to include those when discussing average salary.

Good article and some sound advice, except for the part where it is suggested you use a TFSA to save for an emergency fund, new car or holiday. Your TFSA should be your bottom dollar in life, which you only touch once your pension is depleted and you sold everything non-essential.

The true value of a TFSA is tax free compounding over decades. Money invested (not just saved) in a TFSA becomes pure gold 40 years down the line, but gives zero ir negligible benefits over the short term when compared to a normal savings or investment account.

You are correct, those who can save in a TFSA long term without touching the funds will see the significant benefit and will be better off saving for shorter term goals in Unit Trusts etc. In practice its quite hard for the average salary earner (the focus of this article) to save for retirement in a RA, as well as fill up their TFSA annual allowance, as well as save up to buy i.e. a car in the future, so for them it might be suitable to at least enjoy some tax free growth benefit in a TFSA.

Good point, JustWondering. Especially the building up of Capital Gains over a decade or more in an TFSA, will be exempt.

Unlike (the example of) a normal unit trust where one say invested R10,000 (in the 90’s….equal to R80K today!) and when you withdraw after 30 years, you’re hit with CGT “gains” of your eventual R100K proceeds (between that and R10K base cost)….where in fact the true wealth creation were between R80K (present value) to R100K (proceeds).

In a FTSA you avoid all that……especially if you keep it invested for many years, you’d benefit.

I think that employees should be granted better flexibility with their pension fund contributions i.e. max R 36k in tf etf/unit trust first before paying over pension fund. I get that the policies are in place to “protect” the employee but just think what maxing your tf can do for the fist time earner. Not everyone can reach the tf limit based on their earnings and this would ensure this.

The local chief spoke of his team, not him, struggling to come by with a income of R 100000 p/m. They are supported by car, estate, and all what shine in the sunlight. Way back in time, chiefs, wanting it to, sold the local unemployment subject to better his wealth of said stuff. The only difference with than and now is levels of sophistication to achieve the wanted. Like the folks of past times did say, no news below the sun.

Bas is a bot – please remove $Web

What is the capital value of a salary that keeps up with inflation? A job that pays R25 000 per month, adjusted for inflation over a period of a working career, is worth R46 million today. The same individual would have to earn interest on the capital amount of R46 million to earn the same income, adjusted for inflation.

Now we can calculate the real cost of ANC policies. The cost of state capture and corruption is minuscule relative to the cost of lost opportunities. Regular ANC economic policies rob 20 million unemployed citizens of the benefit of R46 million each. Socialism is a zero-sum game, one man’s gain is another man’s loss. BEE destroys the capital formation that was supposed to create jobs. BEE beneficiaries are plundering the unemployed masses.

Employment opportunities create far more wealth than socialist redistribution or BEE can ever accomplish. Jobs are precious, and policies that destroy jobs are immoral and shortsighted. Our unemployment stats prove the level of ignorance and incompetence in Luthuli House. The market mechanism is waiting to unlock the value of resources and human capital. This process is stopped dead in its tracks and turned around by the ANC. We need a Zondo Commission to investigate the ANC for stealing our future through populist policies.

The disdain for neoliberalism manifests as unemployment, poverty, and social unrest. The cost to the average ANC member for supporting the ANC is R46 million. If you can squander so much capital, don’t complain about poverty.

Again, those figures mentioned, 46 million are meaningless to the average Shack-occupant, bring it down to a meaningful sum (?) confront same people, in a basic understandable reasoned language, hopefully Opposition Parties could gain support?

“If socialists understood economics they wouldn’t be socialists.” – FA Hayek

Agree Sensei. The effects of the “invisible hand” in terms of free-market economics, and stifled by the ANC.

Very insightful article, and great advice. I’m 23 at the moment and am starting to realise that 60 comes a lot sooner than you think, and I most certainly don’t want to live pay check to pay check at that age like my relatives. Obviously, this strategy won’t make you immensely wealthy, for that you should grow a business or be a very savvy investor, but it is good to have a “fall back” and backup plan for the future.

YOLO is perhaps the downfall of most of our generation. If you don’t have the BMW by 21 you are not ‘making it’. As the other commentator said, become debt free.

Meneer van der Merwe(?)…. 😉 You have great wisdom at age 23. (…and what you said about growing a business, but remember, it never grows in a straight upwards line).

Some 30 years ago, when I was in my early 20’s, my (now late) dad gave me a worthy present during my varsity studies in the 1990’s, a book written by Robert Kiyosaki: “RICH DAD, POOR DAD”

And remember: never be disheartened by your old school mates, who went straight from school into a job (when they immediately start to accumulate capital based on salary), while you are slogging it out at varsity (hopefully becoming a medical doctor, engineer, actuary, etc) and living at your parents or pay rent. Those are the “sacrifice years”. Later in life (say around your late 30’s/or 40’s, everyone is different) you’ll exceed your school mates’s comparative wealth, as they get retrenched, etc in life, start over again, while your professional skills remain in high demand. Or nurture your business from a young age. Wish you well!

I know of quite a few CA’s in the private sector that got “Dear John” letters beginning of last year.

Two engineer friends are now in Canada were retrenched at the end of 2019, and were nowhere near 60 years old.

The clock has swung. Just look at the article on the pass rate of the 1st paper of the SAICA entrance exam this year. Where are they going to find jobs in this shrinking market? White engineers are leaving the country because they can’t find jobs locally.

Certain professions will always be in demand, like veterinary surgeons. And who knows what will happen down the line with the technological advancement taking place?

Our engineering jobs are being given to Spanish speaking Cubans ant to boot they are paid more.

A insult and a slap in the face of our engineering students.

The only incentive for a South African to study engineering in SA is the cost, still cheaper than most other countries in the world.

Government is not interested in finding jobs for our unemployed graduates – they are only interested in supporting their Cuban cronies.

The article below in

“…….says Muller, noting that fixed deposits and other cash investments are currently earning very low returns.”

Wrong. Fixed Deposits with the solid banks are paying up 8.4% at present. Nothing “very low” about that

8.4% interest rates are available, but it does require minimum investment amounts might not be reachable for the average salary earner (the focus of this article). These level of interest rates typically requires capital to be fixed for 5 years, which is not suitable for the average salary who might need liquidity for emergency situations.
For smaller amounts, and if you need access to your funds, bank interest rates are quite low around 4% compared to other asset classes and opportunities.

True but with so many dstv dishes that I see around and one more thing is that the average price of sneakers is above R1000 and I see a lot of low income earners wearing them. Surely an average low income earner can afford to put aside a minimum of R1000 for a 3 or 5 year fixed deposit. RSA retail bonds 3 year fixed rate is 7% and 5 year fixed rate is 8.5%. Tymebank offers 6% after 90 days and there’s no minimum deposit. You can withdraw the money any time you want.
Yolo and Fomo are wealth k!llers.

“…Annual income twenty pounds, annual expenditure nineteen, nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery…” Mr Micawber (David Copperfield, 1850)

same as it ever was…

I was looking for that quote when writing the article.

The saving/investing from day one of getting a salary is the best advice. The next best advice is choose wisely what you invest/save in. What very few seem to know is about fees charged and how they can deplete your hard-earned cash over the long term.

ETF’s didn’t exist when I got my first pay check but if I had to start today, I would research the ETF sector, begin there and revisit my portfolio every six months. And also a spread of different local and international sectors. And gold still does glitter.

I do love the YOLO mindset for spare cash though.

Would spending R40k pm for 2 people be seen as very little? It’s interesting that R20k net per individual is the average income in SA,seems quite high in my mind…

In general, this is a good article with good advice IMHO. I am, however, concerned about the advice to get a “professional financial advisor” to assist you. I dealt with a few in my life, and the profit motive in their “one size fits all” advice was to be seen in their eyes (don’t even mention the word “Glacier” in my presence). Rather educate yourself financially, forget about the PC BS they teach in schools. The SYSTEM don’t want you to be free, so go ahead and buy that severely overpriced car so that you can stay a slave to the system and die poor and unhappy.


Yes sadly the words “professional financial advisor” are often used by those who are not and many South Africans have been hurt by unsuitable advice / products sold simply to earn a commission.

Best practice would be to use a 1) Certified Financial Planner (the highest regarded mark of experience, knowledge and ethics) 2) Who earns their income based on the quality of ongoing advice and not the sale of products 3) Have a demonstrable track record and client testimonies and 4) Can think out of the box and give suitable advice for your unique situation

Average South African Salary: R23,122 per month
Car Payment in order to keep up with his friends: R20,000 per month
Balance left: R3,122 per month
Brains: Zero

Welcome to the northern suburbs of Johannesburg.

It’s all about the bucks, boet.

Misleading headline and yet another advertorial.

If the money you have leaves you suffering how will saving help you? 10% of R25000 is R2500. Save this and you won’t earn more than 13K in retirement. And that won’t be enough.

Try and buy a property with that gross salary…good luck if you take all the other expenses into account.

On the average salary you can qualify for a loan of up to R950k, you can buy decent housing for that.

The most scary part of it all is to get the average salary as a pension you need around R5 to 6 million. Yes yes I know it could be up quite a bit or down quite a bit.

From the above it is quite clear it wont be an amount you put away a couple of months before you retire. Remember you are earning the average salary.


…it means, for those ‘needy’ South Africans that simply must have a new vehicle (for say upwards of R500K), there is now a 96-month finance term.

And don’t forget to make maximum use of that good ol’ Balloon finance option.

By playing around with bank finance calculators, is is what I get:
R1,000,000 purchase price
9% interest
84 months term (7yrs)
Zero deposit!! 🙂
But with max 40% Balloon option.
Works out to R12,653 per month.

So there we go….R23K per month is more than enough to drive a brand new super-executive saloon every 7 years 😉

Got to keep the Dealers alive!

For a true idea of salary / wage I suggest using the median income and not the average. It will unfortunately paint a much worse picture.

Does this average include the Zulu king’s R160 million from his subjects and his R80 million grant from the government. oh by the way is this taxed?

Meaningless article.

This article is a another reminder that “Statistics” is a hugely important subject that should be a compulsory subject at school level.

And so also should there be a subject on “Personal Finance”.

It never ceases to amaze me that school curriculums compiled by “professional educationists” are so consistently devoid of preparing children for the practical realities of their future lives.

What would be the median salary? Does Stats SA disclose this? I think this would be a better number to base what the average SA salary is.

“Black tax” – When black people have to contribute to 20 or so unemployed relatives living on the rural homestead

“ANC tax” – When the middle class pays tax to the government and gets hardly any services back in return. When a huge chunk of the petrol price disappears into a tax black hole. When premium rates are paid for private schooling, security etc.

I think a median salary instead of average salary would be very interesting point of discussion, the average was bound to be far from reality. However, I guess it was found be relevant because an average reader of this article is an educated person with some formal tertiary qualification. Sad truth is for most employees in South Africa, the only way they ever saw a anything close to this “average” in their bank account was a personal loan.

I highly doubt the accuracy of figures stated in this article. In fact I was shocked enough to open the Quarterly Employment Survey. In Q4 of 2020 it was R9640. Do you think our economy has done well enough to have more than doubled this figure in a few months?

I think it has to do more with the author INCORRECTLY reading the report.

Please remember (everyone commenting) that salaries aren’t static.

People gain experience, move up (& down) in their careers, make changes, get better educated, etc.

People ranting about the average not being accurate totally missing the point too.

Reading with amusement. Average salary R23122 in the formal sector. What is classified these days as formal sector. Lol. Let us change the wording to wages. Perhaps that will reflect proper stats. Can not be more than around R6000. And even R 23000 is pathetic, equates to $1600.

End of comments.




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