The steep decline in the number of take-home payments has adjusted the average South African salary by a few percentage points, according to the BankservAfrica Take-home Pay Index (BTPI) for December 2020.

“The real average take-home pay increased by 2,1% year-on-year,” says Shergeran Naidoo, BankservAfrica’s Head of Stakeholder Engagements. “The reason behind this is not positive. The average salary rose as a result of the decline in the number of lower paid earners that led to a 5,4% nominal increase. The total take-home pay in real terms declined by 2% year-on-year.”

“The aggregate take-home pay decline proved to be not as excessive. However, this has come off a very low annual base. In December 2019, the number amounted to 4% less than December 2018,” explains Mike Schüssler, chief economist at economists.co.za.

The BTPI, which measures monthly salaries processed by BankservAfrica through the National Payment System, also takes into account the ongoing shifts in the Covid-19 UIF TERS payments. These movements – as seen in previous BTPIs – have led to the index’s salaries not at normal levels.

“Although TERS payments applications closed in September, it re-opened in November for October applications to assist industries feeling the brunt of the lockdown impact. These payments were still being paid in December,” says Schüssler in reference to the Department of Labour’s recent information.

The delay in payments was seen at the beginning of the announcement of relief funds in March. Some of these were paid in the May to June period. “This made practical payments via the normal payment systems difficult as tax was treated differently. Therefore, in some months employees were not paid via the normal payments system, and in other months this resumed when catch up payments were made,” says Schüssler.

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