Take-home pay declines by 5.6% in real terms
But salary numbers are still looking positive in March 2022
The real average South African salary fell below the R15 000 mark in March 2022 and recorded one of the biggest annual falls on record of 5.6%.
But the average decline, shown in the BankservAfrica Take Home Pay Index (BTPI), hides the fact that more people are receiving salaries compared to a year ago. The end of the national State of Disaster has also resulted in more people rejoining the workforce.
With that being said, the average take-home pay is under pressure from the higher inflation rate. Our data also suggests that employees returning to work are likely to be from the lower-paying sectors.
Shedding light on the odd movement
The very fact that the monthly estimate of employment numbers is up on a year ago suggests the return of casual and weekly workers. The most vulnerable sectors in the Covid-19 pandemic, such as tourism and entertainment, are making a comeback. Additionally, the increase in monthly pay cheques shows firms are hiring people - particularly people from the lower end of the salary scale – for new employment opportunities.
The thinking behind this stems from the odd movement between the increasing number of monthly paid employees despite the significant average take-home pay declines. In the current economic context, we can deduce that this pattern has emerged from the employment growth within a specific sector or the expanding pool of younger, inexperienced employees in the overall economy.
Overall, the total number of people paid via BankservAfrica has exceeded the 2020 numbers and is very close to reaching the 2019 levels. Although this is an estimation, the trend appears positive for the number of people employed.
The average nominal salary was R15 121 in March, nearly R1 000 lower than the record R16 022 registered in February. In 2021 terms, the average take-home pay was R14 969. The March numbers are usually lower as the year-end bonus pay-outs fall out of the index’s smoothing.
The real decline of 5.6% is one of the biggest falls on record (see the editor's note below: we have comparable data only from the end of 2018 due to SACU country data falling away in mid-2018).
Average private pension dips in real terms for the second time in 20 months
The BankservAfrica Private Pensions Index (BPPI) showed the average real private pension declined by 0.1% on a year-on-year basis.
In real terms, the average real private pension was R9 475.
The total take-home pay and private pensions processed in value terms declined by 1.3% in real terms but increased by 4.5% in nominal terms.
Based on these numbers, one can expect overall retail sales to show a declining or slowing trend in the next month or two.
Table 1: The BankservAfrica Take-home Pay Index data
|
Month
|
Nominal average take-home pay |
Real take- home pay
|
Nominal BTPI % change YoY
|
Real BTPI % change YoY
|
Nominal average pensions paid
|
Real private pension
|
Nominal BPPI % change YoY
|
Real BPPI % change YoY
|
|
Jan-21 |
15610 |
16159 |
3,0% |
-0,2% |
8937 |
9534 |
12,0% |
8,6% |
|
Feb-21 |
15814 |
16180 |
4,7% |
1,7% |
8929 |
9492 |
8,9% |
5,6% |
|
Mar-21 |
15161 |
15860 |
3,8% |
0,7% |
8889 |
9488 |
8,6% |
5,7% |
|
Apr-21 |
15183 |
16082 |
6,8% |
3,1% |
9333 |
9701 |
10,5% |
7,1% |
|
May-21 |
14709 |
15701 |
4,5% |
0,1% |
9202 |
9544 |
11,5% |
6,8% |
|
Jun-21 |
14980 |
15504 |
4,4% |
-0,5% |
9524 |
9670 |
11,7% |
6,1% |
|
Jul-21 |
14620 |
15027 |
5,1% |
0,0% |
9527 |
9693 |
10,8% |
5,6% |
|
Aug-21 |
15190 |
15275 |
8,1% |
3,1% |
9588 |
9720 |
10,1% |
5,1% |
|
Sep-21 |
15312 |
15593 |
9,2% |
4,1% |
9576 |
9695 |
9,7% |
4,6% |
|
Oct-21 |
15089 |
15396 |
1,7% |
-3,1% |
9471 |
9567 |
9,5% |
4,3% |
|
Nov-21 |
14827 |
15278 |
0,1% |
-4,7% |
9357 |
9485 |
6,6% |
1,5% |
|
Dec-21 |
15382 |
15458 |
0,0% |
-5,2% |
9427 |
9505 |
7,1% |
1,7% |
|
Jan-22 |
15755 |
15441 |
0,9% |
-4,4% |
9423 |
9490 |
5,4% |
-0,5% |
|
Feb-22 |
16022 |
15510 |
1,3% |
-4,1% |
9481 |
9537 |
6,2% |
0,5% |
|
Mar-22 |
15121 |
14969 |
-0,3% |
-5,6% |
9379 |
9475 |
5,5% |
-0,1% |
Source: BankservAfrica and economists.co.za
