South Africa’s real take-home pay increased by just 0.7% in March 2021, with the average salary reaching R15,092 in nominal terms and R12,749 in real terms.
The growth in March 2021 came off the low base in March 2020 when the country was placed under hard lockdown.
“The good news is that the average take-home pay has returned to the pre-Covid-19 trend,” BankservAfrica said. “The number of employees in the broader payment system of formal employers from larger companies has recovered fast as the economy has re-opened.”
When the hard lockdown began in March 2020, the BTPI recorded a small number of employees in the formal economy who were already missing out on payments. This was particularly notable among weekly and daily paid employees, the group said.
The last four days of March 2020 included a Friday and a Monday (which are two important days for weekly payments) when South Africa was already in lockdown. BankservAfrica’s data subsequently recorded a drop in the number of daily and weekly payments made to employees.
In March 2021, a small increase in the number of weekly and monthly take-home payments was observed, while daily payments continue on a declining trend.
“Overall, the March 2021 number of take-home payments was slightly higher than the March 2020 number. The year-on-year change came in at under 1%, which we believe marks the turning point for employment numbers improving from the depth of the pandemic. The BTPI is gradually returning to normal,” it said.
Chief economist at economists.co.za, Mike Schüssler said that the shift in pay trends can be chalked up to 95% of private sector jobs in larger firms having recovered.
“But, with daily and weekly payments still far below normal, one can assume that smaller firms and the informal sector have a long way to go for recovery,” he said.
Thus the current improvements are still being seen as a ‘recovery’ – as the actual employment numbers are still slightly below the BTPI’s average.
According to BankservAfrica’s data, the overall total salaries and pensions paid increased 1.8% in real terms compared to March 2020. But the overall amount is 6% lower in nominal terms than in March 2019.
“We believe a further test on the actual economic recovery will come when the last TERS and disaster relief payments have been made by government,” Schüssler said. “The actual new growth in the economy is probably a little way off, but it has been faster than one would have expected and should help consumer spending.”