Average take-home pay increases at its fastest pace in January 2022

Latest salary data improves to pre-pandemic January 2020 levels

South Africa’s average salary in January 2022 increased at its fastest rate since the pre-pandemic January 2020 period, according to the monthly BankserAfrica Take-home Pay Index (BTPI).

“The average take-home pay in January 2022 increased by 13% in nominal terms to reach R17 410,” says Shergeran Naidoo, BankservAfrica’s Head of Stakeholder Engagements. “The real BTPI increased by 6% to stand at R17 102, representing a 10.2% increase between January 2022 and December 2021.”

The busy December holiday and shopping season boosted payment numbers by an estimated 190 000 to casual workers in December, which was far above the norm.

“This number of payments made to casual workers in December was the highest in 33 months and slowed down to estimated 112 000 by January 2022,” says Mike Schüssler, Chief Economist at economists.co.za. “The extra weekly payments in December are a good indication that some of the previously impacted industries were able to resume business over this period.”

The higher number of casual worker payments made in December lowered the average take-home pay in December while the drop in number of casual workers paid in January increased the average take-home pay. The January typical take-home pay increased by 3.2% in real terms. The January payments also contributed to the median salary rising to its highest level since February 2021.

For the first time in 19 months, the real average private pensions declined by 0.5% on a year-on-year basis.

“The real private pension was R9 465 in January 2022 as shown in the BankservAfrica Private Pensions Index,” says Naidoo.

Signalling a stronger start for consumer spending in 2022, the overall total amount of money paid to South African employees and private pensioners increased by a nominal 8.9% year-on-year.

The prior months reflected substantial improvements, but it was only in September 2021 when the real total money paid for salaries and pensions increased above the previous month’s record. This was repeated in December 2021 and again in January 2022.

“The overall payments are clear indications for the macroeconomy that consumers are back to receiving pre-pandemic levels of real income,” says Schüssler. However, there is one proviso - fewer people are receiving the total amount of their take-home pay than before the pandemic.

Although the number of casual payments has improved, the decline in the number of monthly payments is becoming more apparent for reasons such as retrenchments and salary payment declines to airline, hotel and State-Owned Entity employees where operations have not normalised.

“Overall, the commodity price boom has greatly helped the country’s employment as the knock-on impact of nearly R300 billion inflows into the economy over the last year has certainly had a positive impact,” ends Schüssler.

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