SA salary earners took another knock in July, as average take-home pay continued its months-long downward trend and cost-of-living pressures mounted, particularly from sharply higher municipal service tariffs.
According to the latest BankservAfrica Take-home Pay Index (BTPI), the nominal average take-home pay declined by 1.1% month-on-month to R17,144 in July. This marks the fifth consecutive monthly decline and places the index 6.9% below its February 2025 peak, though still 4.6% higher than in July 2024.
The BTPI tracks about 3.8-million monthly salary payments in the formal sector and is considered a barometer of earnings and job market conditions.
“Though the slowdown in 2025 is concerning, the data also points to the current employment trends,” said independent economist Elize Kruger.
According to Kruger, recent data shows a decline in the number of employees earning between R40,000 and R100,000, pointing to job losses, while most new salary payments are clustered in lower income bands — particularly below R10,000 and in the R20,000 — R30,000 range.
“Additional salaries at lower levels and losses at the higher income side could partly explain the depressed trend in the average,” Kruger said.
Adjusted for inflation, real take-home pay also declined in July, down 0.9% month-on-month, but these were still above year-ago levels.
With inflation forecast to average 3.5% in 2025 — compared to 4.4% in 2024 — and industry information suggesting an average salary increase above 5%, 2025 will be the second consecutive year of a real increase in earnings, Kruger noted.
“This is a welcome tailwind for salary earners, supporting consumption expenditure and could assist in softening the impact of global headwinds on the local economy,” she said.
But salary earners are not out of the woods yet. According to the BankservAfrica report, a comparison between average headline inflation and the nominal average increase in the BTPI since 2017 suggests that salaries have recovered — but not fully after the weak years between 2021 to 2023.
While inflation has eased, the reality for many households in July was anything but. The annual increases in municipal service charges, implemented each July, far exceeded both inflation and salary growth — especially in major metros like Joburg.
“Salary earners continue to grapple with the higher cost of living. This impact is felt more sharply in July — the month notorious for annual municipal tariff increases — and serves as a stark reminder that some costs continue to rise well above the country’s inflation rate,” Kruger said.
“This trend evident in administered prices will remain a key obstacle to bringing inflation expectations closer to the 3% target.”
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