Read more
Are you earning the average take-home pay of R17 296 and is it enough to cover all your expenses or are you affected when it decreases?
Picture: iStock
The average take-home pay slowed for the third consecutive month in May, reflecting the impact of a subdued economic environment with stalled growth in the first quarter and a weakening global outlook, currently fuelled by the heightened volatility in the Middle East.
According to the latest BankservAfrica Take-home Pay Index (BTPI), which tracks approximately 3.8 million salary earners in South Africa, the nominal average take-home pay decreased to R17 296 in May, 1.3% lower than the R17 532 registered in April, Shergeran Naidoo, BankservAfrica’s head of stakeholder engagements, says.
However, this figure remained significantly higher than the R15 903 recorded in May 2024.
“The upward trend in take-home pay from mid-2024 to early 2025 has been a positive development. However, recent months reflect a U-turn, with 2025 proving to be a volatile year so far, marked by multiple global shocks accompanied by a good dose of local challenges,” Elize Kruger, an independent economist, says.
“Downward revisions to global as well as local economic growth prospects have lowered confidence levels and put a pause on investment decisions, as investors and households hold back on their spending decisions. Together, these could hurt employment and earnings prospects of salary earners in the coming months.”
Quarterly Employment Statistics show average take-home pay of R28 289
According to the Quarterly Employment Statistics for the first quarter of 2025, the average monthly earnings paid to employees decreased by 0.1% from R28 316 in November 2024 to R28 289 in February 2025.
According to the BTPI, take-home pay, adjusted for inflation, increased by 1.1% in May to R14 832 compared to R15 003 in April, but remained 5.8% higher than year-ago levels. “The significant moderation in consumer inflation continues to have a positive impact on salary earners and their purchasing power, with the latest headline inflation figure for May 2025 at only 2.8%.
“However, the recent spike in international oil prices, due to the escalating conflict in the Middle East, could result in higher-than-expected headline inflation in the coming months and into 2026, Kruger says.
She points out that the international Brent Crude Oil price increased to around $78/barrel after the US’s attack on Iran’s nuclear facilities, but talks about a ceasefire quickly triggering a reversal with oil prices dipping below $70/barrel again.
“Against expectations and despite the global volatility, the rand exchange rate remained notably resilient, providing a marginal offset of the higher oil prices on fuel price expectations. With the daily under-recovery at pumps running between R1.50/l for petrol grades and R2.70/l for diesel in recent days, it is clear that economic pain is on the radar for salary earners and the economy at large.”
ALSO READ: Take-home pay increases significantly in 2024
Petrol increases coming that will affect take-home pay
Kruger points out that petrol prices are forecast to increase by about R1/l and the prices for diesel by R1.30/l on 2 July, and further increases could be expected in August. “These will push headline inflation upwards towards 5% by year-end, ahead of the 3.6% forecast for 2025.
“Concerningly, with the higher base calculation of 2025, the forecast average headline inflation for 2026 could be well above 4.5%, eroding the positive effects of lower inflation and likely triggering more conservatism from the South African Reserve Bank (Sarb).
“Any further monetary loosening looks unlikely at this stage, considering that the Middle East conflict is intensifying and the resultant negative impact on local fuel prices. Still, despite the negative developments outlined, 2025 is expected to be the second consecutive year of positive real take-home pay growth, supporting demand in the economy.”
ALSO READ: Salary survey shows gap between increases and inflation narrowing
Remchannel survey shows average salary increased by 5.82% in 2025
Meanwhile, the Remchannel Salary and Wage Movement Survey, a biannual report by Old Mutual published in April 2025, indicated that the average salary increased by 5.82% in 2025, compared to 6.09% in the previous year.
Kruger says this trend suggests a more cautious approach by employers, who must also prioritise cost control amid a constrained economic environment. Interestingly, she says, the report revealed a reduced overall staff turnover rate of 13.5%, reflecting a market with fewer new job opportunities due to widespread downsizing by companies.
She emphasises that this data confirms the financial pressures employees live with, as 39% of those who resigned were seeking better pay and career growth, while 31% left due to dissatisfaction with their current roles.
“With the local economy stalling in the first quarter and the weakening global backdrop adding to the downside scenario, the prospects of favourable earnings and employment opportunities have dimmed.
ALSO READ: Salaries decreased by 2% in April, but higher than a year ago
Policies must foster rather than deter employment in SA
“The latest Quarterly Employment Statistics survey released by Statistics SA indicated that total employment in the formal non-agricultural sector decreased by 74 000 in the first quarter of 2025, with employment falling from 10.65 million people in December 2024 to 10.58 million people by March 2025.
“According to the survey, 95 000 jobs were lost between March 2024 and March 2025. The Labour Force Survey, which also included the informal sector, agricultural sector and employment in households, echoed the pressure, showing that the unemployment rate ticked higher to 32.9% in the first quarter, with 291 000 job opportunities lost.
“The unemployment situation in South Africa remains a crisis and deserves to be one of the top priorities of government. It is imperative that government pushes forward on structural reforms across sectors such as energy and logistics.
“This could contribute towards solving our local predicaments, lifting the local economy’s medium-term growth potential, but government must also ensure that policies and laws will foster rather than deter employment in South Africa.”
