The nominal average take-home pay declined to R17 296 in May, 1.3% lower than the previous month as job opportunities and earnings outlook remain grim, according to the latest BankservAfrica Take-home Pay Index (BTPI).
The index tracks approximately 3.8 million salary earners in South Africa.
However, this figure remained significantly higher than the R15 903 recorded in May 2024.
This was third consecutive month that take-home pay slowed reflecting the impact of a subdued economic environment with stalled growth in quarter and a weakening global outlook, currently fuelled by the heightened volatility in the Middle East.
Elize Kruger, an independent economist, said, “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.”
BankservAfrica said downward revisions to both global and local economic growth prospects have lowered confidence levels and put a pause on investment decisions, as both investors and households hold back on their spending decisions. Together, these could hurt employment and earnings prospects of salary earners in the coming months.
In real terms, take-home pay, adjusted for inflation, moderated by 1.1% month-on-month to R14 832 in May 2025, compared to R15 003 in April, but remained 5.8% higher on 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 CPI 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 CPI in the coming months and into 2026.
Petrol and diesel prices are forecast to increase by about R1/l and R1.30/l, respectively on July 2, and further increases could be expected in August. These will push headline CPI 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 CPI 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.
“Any further monetary loosening looks unlikely at this stage, in light of the intensifying Middle East conflict 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,” says Kruger.
Meanwhile, The Remchannel Salary and Wage Movement Survey, a biannual report by Old Mutual published in April 2025, indicated the average salary increased by 5.82% in 2025, compared to 6.09% in the previous year. This trend suggests a more cautious approach by employers, who must also prioritise cost control amidst a constrained economic environment.
BankservAfrica said interestingly, 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. This data confirms the financial pressures employees are under, as 39% of those who resigned were seeking better pay and career growth, while 31% left due to dissatisfaction with their current roles.
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