The BankservAfrica Take-home Pay Index (BTPI) shows the average salary for February was R15,517 on a seasonally adjusted basis in real terms. This is in line with the revised BTPI base, adapted to the CPI in December 2021.
The nominal average take-home pay was 1.3% up and reached R16,022 in February 2022.
“While the BTPI focuses more on the average salary, it makes sense to point out that after the double-digit declines in the casual and weekly wage data estimates for a long period, both these salary bands have now had double-digit growth on a year-on-year basis,” BankservAfrica said.
“Thus, the actual decline in the average real take-home pay signals a return to work for the more vulnerable groups of lower-paid employees.”
BankservAfrica expects inflation will stay elevated at over 5% – even over 6% – for several months. This may mean that take-home salaries will face more than only a few months of declines for a lengthy period, like closer to a year.
“The current war between Ukraine and Russia has also impacted major commodity prices – from oil to wheat prices – which will impact inflation in South Africa and globally. As most salary agreements are done retrospectively, take-home pay will take a while to catch up to these developments.”
Owing to the higher inflation rate and the Russian war in Ukraine – which has led to soaring oil prices – many are expecting the South African Reserve Bank to hike interest rates at tomorrow’s MPC meeting.
“Although household borrowing among South Africans has eased to below the inflation rate, the hike could lead to higher mortgage repayments,” it said.
Together with the escalating food prices and rising fuel costs, this could put South African salaries under even more pressure, the group said. While the average take-home pay decreased, the overall take-home totals paid into all the bank accounts of employees increased by 0.6%.
“February 2022 was the first time since September 2019 that the total monthly equivalent payments increased to over 4 million again. While this data is very volatile in our database, it tells us that most (probably not all) of the employment from the Covid-19 shock has recovered,” BankservAfrica said.