The average take-home pay of South Africans saw a spike of 13.5% in September 2021, before inflation is deducted, reflecting the fastest growth on record according to the latest BankservAfrica Take-home Pay Index (BTPI).
However, with disruptions in the supply chain and the recent July unrest, this upward trend unlikely to continue, BankservAfrica cautioned in the index released on Thursday.
“The nominalised average salary was R15 794 in September 2021, one of the highest on record and in years,” says Shergeran Naidoo, BankservAfrica’s head of stakeholder engagements.
“In real terms [after taking inflation into account], the average salary was R13 047, representing a substantial growth of 8.3% year-on-year,” adds Naidoo.
The unexpected growth in salaries is attributed to several factors including overtime pay for South African Defence Force (SANDF) and the South African Police Service (SAPS) members that were deployed to monitor and control the unrest in July.
BankservAfrica says this added almost R1 billion in overall salaries.
Another contributing factor is the adjustments in civil servants’ salaries. Over 800 000 extra payments mostly came from government departments where 400 000 of these payments were made between April and August this year.
A further 400 000 payments were made in September this year, and these contributed 80% of the increase in BankservAfrica’s take-home pay data.
According to the index, these added payments “reflect the delayed implementation of the Public Service Co-ordinating Bargaining Council’s salary adjustment for civil servants for a cash allowance that is back payable” for the period from the April 2021 to March 2022.
Another factor was the low base for the take-home pay in September last year. Most casual employees- especially those whose jobs were the worst affected- gradually returned to work when the economy showed signs of recovery.
But considering that many firms had not fully recovered financially, the average take-home pay was lowered from time to time.
“All these factors indicate that the average take-home pay will not increase at September’s rate in the next month or so,” says Mike Schüssler chief economist at economists.co.za.
“The worldwide supply chain issues and the continuing shocks from July’s unrest are likely to constrain economic growth and affect salary increases. We, therefore, expect a downward adjustment for salaries in the coming months,” he reiterates.
Palesa Mofokeng is a Moneyweb intern.