Their years of training and expertise mainly contribute to their earnings. He believes that salary increases to public servants would cost the government an additional R37.8-billion in 2020 – money it would have to borrow, exacerbating SA’s … “The reason for these large increases are promotions of employees, especially those in lower salary bands,” according to National Treasury. We have answered that question in the Salary Guide for SA below. Staff Writer 10 December 2020 South African private-sector workers are set to receive an average pay rise of 5% in 2021, which is a cautious improvement over the 4.2% … Companies within thriving industries tend to provide higher and more frequent raises. The World Bank is more aligned with our forecast and anticipate growth of 0.90% this year; Eskom remains a significant danger to the economy simply because it is too big to fail. The historic methodology adopted in South Africa, when determining an equitable salary increase, has been to add a 2.0% real increase to the forecasted inflation figure. The Average Salary in South Africa is R22500.00. thesouthafrican.com is a division of Blue Sky Publications Ltd. Reproduction without permission prohibited. Employees net take home pay was therefore eroded; Unemployment is a crisis. South African Economy. Copyright © Blue Sky Publications Ltd. All Rights Reserved. Unreliable electricity supply and load shedding exacerbates growth constraints. The Average Salary in South Africa is R68,567. South Africa– Blue Sky Publications (Pty) Ltd T/A TheSouthAfrican Number: 2005/028472/07. South Africans are among the most hardworking nationals in the world. As an example, if the salary increase is 6.0% and inflation is 4.0%, then a 2.0% real increase has been granted. The previous year was R21 540. Excluded in this total is 75% of the South African National Defence Force. Few people in South Africa earn the average salary, due to the extreme chasm in wage inequality. Advanced 2020/21 Survey. J-Lo and A-Rod say they are ‘working through’ things, ‘Tsha Tsha’ actress Noxolo Maqashalala dies aged 44, The Cold Test: Maserati’s hot MC20 no flake in snow trials [watch], Watch | Stellenbosch FC v Mamelodi Sundowns highlights – 13 March, The average wage for a worker in South Africa is R22 500 per month, In the previous quarter, that figure was R22 375. Exceptions do exist, but generally speaking, the situation of any company is closely related to the economic situation in the country or region. Employment law litigator Joe Mothibi explains that an annual increase is not a given unless stated otherwise in the job contract. This remains significantly lower that that forecast by the MPC Committee at their January 2020 meeting; they anticipate 1.20% which we consider to be optimistic and unattainable. In terms of the 2018 wage agreement, public servants on salary bands 1-7 were given a 7% increase in 2018, while in 2019 and 2020 their increases were aligned with inflation, plus 1%. The initial agreement was reached in March 2017 and average annual inflation was 5.3% in that year. Facilitator's Proposal on a Salary and Wage Collective Agreement 2018-2021 Draft 2 … Specialist recruitment firm Michael Page has published its latest salary guide which sheds light on the average IT salaries in South Africa in 2020.. Enter the survey competition, Netflix possibly clamping down on users who share passwords, Just a rough patch? The next process in the scientific methodology we employ is to establish the quantum of the “real increase”. STATISTICS SOUTH AFRICA 3 P0141 Consumer Price Index – February 2020 KEY FINDINGS Headline consumer price index (CPI for all urban areas) Annual consumer price inflation was 4,6% in February 2020, up from 4,5% in January 2020. In this report, you will find critical insights on 2021 budget plans and the current hiring environment, as well as pay practices and performance management data. Everybody needs an annual salary increase, right? But following the start of the pandemic they have cut that figure by almost 20% to 5.5%. Adjusted for a global inflation rate prediction of approximately 2.8%, real-wage growth is expected to be 2.1%, higher than the only 1% real-wage salary increases across the … To help address this need, we're excited to announce the release of our 2020 Salary Increase and Turnover Study - Second Edition results, featuring input from more than 2,800 participating companies on pay trends across 122 countries. ... Country Manager at Airbnb South Africa. Listed above are the average annual increase rates for each industry in South Africa for the year 2020. Detailed salary report based on career, education, experience, gender, age etc. The consumer price index increased by 1,0% month-on-month in February 2020. The official rate is 29.1% however hardly a day goes by without news of another company announcing massive retrenchments. You can explore specific areas in each city, or other areas around South Africa, on any of South Africa’s big property sites, such as Property24 and IOLProperty. The below illustration provides a salary calculation for a South Africa resident earning R35,000.00 per annum and assumes standard expenses, tax credits and provisions have been made where necessary. The table below illustrates the real increases granted by South African companies over the last 17 years: Our original article furnished some historical context why the “rule of thumb” of a 2.0% real salary increase was no longer valid, feasible or affordable despite the fact that the average increase granted by South African companies over the last 17 years was 1.7%. Average monthly earnings paid to employees in the formal non-agricultural sector increased by 0.6% quarter-on-quarter and 4.5% year-on-year. The facts from StatsSA read as follows: For some, this will be a crumb of comfort. But sadly, a storm will be coming over the horizon. Once again, we retain our assertion that a 1.0% real salary increase is equitable to all stakeholders. We are delighted that they have now reduced their forecast inflation rate in line with ours. The annual inflation rate in South Africa edged down to 3.1 percent in December of 2020 from 3.2 percent in November and in line with market expectations, moving closer to the lower band of the South African Reserve Bank's target range of 3-6%. Doctors in South Africa earn approximatelyR72,800 per month, making them one of the highest-paid civil servants in the country. The rate dropped to below 5% in 2018 and reach a nine-year low of 4.1% in 2019. You are viewing an example South Africa R35,000.00 Income Tax Calculation for 2021 / 2022 Tax Year. The annual salary Increase in a calendar year (12 months) can be easily calculated as follows: Annual Salary Increase = Increase Rate x 12 ÷ Increase Frequency “ The average salary increase in one year (12 months) in South Africa is 5% . The annual salary Increase in a calendar year (12 months) can be easily calculated as follows: Annual Salary Increase = Increase Rate x 12 ÷ Increase Frequency “ The average salary increase in one year (12 months) in South Africa is 5% . Further, medical aid costs are increasing in excess of inflation and have been for some time where the problem was compounded by the fact that the medical aid tax credit was not increased last year. Why do most workers in South Africa, earn more than others? We have gone through the mill this year, so it’s something of a surprise that the average wage has risen in South Africa. Address: Regus Business Centre We are delighted that they have now reduced their forecast inflation rate in line with ours. For others, it won’t mean a great deal. Just to keep your current income in line with the expected official inflation rate (4.8%), you would need a salary increase of around 6%. In our original article (https://www.axiomatic.co.za/projected-2020-south-african-salary-increases/) we forecast average inflation for 2020 of 4.7%, significantly lower than most market commentators and especially the SA Reserve Bank’s Monetary Policy Committee (“MPC”). Complete The South African's latest reader survey by 31 March 2021 and win R6000 in cash. Although full-time figures dropped by the barest of margins, more part-time workers have entered the jobs market. Telkom (3,000), Massmart (1,450); Sibanya Gold (5,270) –. According to the Quarterly employment statistics (QES) survey released by Statistics South Africa (Stats SA), jobs in the formal non-agricultural sector increased by 75 000 in the third quarter of 2020. Our model is currently forecast growth in 2020 of a meagre 0.7%. At the lower-end, PwC found that South Africans will likely see minimum increases of between 4.5% and 5.0% across every major sector – in-line with the … At the Tower Group, we understand that with costs increasing and remuneration levels barely able to keep up, workers in every industry and at almost every level want to know they can expect a little more each year; indeed, most of us feel we are even entitled to it.. 3 Salary Increase Factors Covered by South African Legislation The proof is in the country’s economy. Jobs in the SA formal sector up in the 3rd quarter of 2020. This is a guide only as other factors such as location, experience, and learning has been known to influence how much a person can earn. This is a 0,6% increase compared with August 2019, and an annual increase of 4,5%.Read more here: https://t.co/ga4Tyri9wF#StatsSA #employment pic.twitter.com/jEDy9vC2jg. If 2020 was an eTV movie, it would be Anaconda: People have had enough of it and there’s no need for it to carry on. In our original article (https://www.axiomatic.co.za/projected-2020-south-african-salary-increases/) we forecast average inflation for 2020 of 4.7%, significantly lower than most market commentators and especially the SA Reserve Bank’s Monetary Policy Committee (“MPC”). This interdependency highlights the difficulty with forecasting an equitable salary increase for employees. To ensure that you stay informed, email us at info@axiomatic.co.za so we can send you regular updates. A forecast by Korn Ferry estimates that salaries globally are expected to increase by 4.9% on average in 2020. Currently, the official salary for cabinet ministers in South Africa for one year is R2 401 633, while deputy ministers of South Africa earn an annual salary of R1 977 795. Our inflation forecast of 4.7% for 2020 is therefore now closely aligned with the view of most market participants. Cognisance must be taken of the fact that inflation in South Africa is notoriously difficult to predict for the main reason that the currency exerts a significant influence on inflation. The P-E Corporate Services Salary Trends report is based on over 500 benchmarked positions across all industries. However, due to high levels of inequality in the country, this average is not reflective of what the majority earn. “Full-time employment decreased by a marginal figure of 2 000 quarter-on-quarter, from 9 164 000 to 9 162 000. 4TH FLOOR, 82 GRAYSTON DRIVE, SANDTON, SOUTH AFRICA, TEL: + 27 11 305 1940 TEL: + 27 11 305 1941 FAX: + 27 11 784 5087, JUMEIRAH LAKES TOWERS, DUBAI, UNITED ARAB EMIRATES, PROJECTED 2020 SOUTH AFRICAN SALARY INCREASES: JANUARY 2020 UPDATE. P-E Corporate Services has released its 2019/2020 Salary Trends report, which shows the average salary increase in South Africa over the last year was 6.2%. Average Yearly Salary: R204,000. Further, the Bureau for Economic Research is now forecasting 4.8% ( previously 5.0%) and the Reuters Econometer survey 4.6% (4.7%). Total employment increased by 16 000 or 0,2% quarter-on-quarter, from 10 197 000 to 10 213 000 during that time. Some 830 000 public servants employed in 2020 have been working for government since 2010. CareerJunction, one of South Africa’s top job boards, has just released its 2018 Salary Review, which explores average salary offerings across South Africa’s top-10 sectors. Meanwhile, part-time employment increased by 18 000 or 1.7% quarter-on-quarter, from 1 033 000 to 1 051 000 in the previous quarter.”, Average monthly earnings were measured at R22 500 in the formal non-agricultural sector of the economy in November 2019. Salary increases are inexorably linked to inflation; where inflation is one of the most important determinants when deciding on the salary increase. Cost of Living vs Salary in South Africa Salary Breakdown In South Africa. Address: Riverbank House, 1 Putney Bridge Approach, London, SW6 4TJ. A survey among more than 210 local companies by the UK insurance and advisory firm Willis Towers Watson show that at the start of 2020, employers in South Africa were planning to give their staff an average annual pay rise of 6.8%. Average Monthly Salary: R17,000. Average salary in South Africa is ZAR 489,189 (US$ 47,408). Salary increases . To ensure that you stay informed, https://www.axiomatic.co.za/projected-2020-south-african-salary-increases/, Retirement funds: Implications of the 2019 Taxation Laws, An FSCA Interpretation Ruling in respect of section 37C of the Pension Funds Act. Buying: House prices in South Africa increased by an average of 3.6% in 2019 which was slightly lower than the 3.8 percent year-on-year growth in 2018. If one was therefore to simply apply a formula, one would derive a salary increase for 2020 of 5.7% calculated as follows: There can be little doubt that the South economy is struggling: The scientific formula would suggest a salary increase of (4.7% + 1.0%) = 5.7%. Given this, we will continue to revise our projections over the coming months. But these gains are likely to be hampered going forward, due to the impact of load shedding and global health issues. Employees who earn a basic salary of R9000,00 or less shall receive a further increase of zero comma five percent (0.5%) with effect from 1 January 2019 based on the salaries of the employees as at 31 December 2018. A real increase is defined as the increase after inflation has been taken into account. 1st Floor, Block B, North Park, Black River Park, 2 Fir Street, Observatory, Cape Town, 7925, South Africa IS TAX ASSISTANCE TO EXPATS TAXABLE OR NOT? Gross earnings paid to employees increased by R52.3 billion or 7.2% from R724.1 billion to R776.4 billion in the last quarter. Postal: Blue Sky Publications (Pty) Ltd T/A TheSouthAfrican, PO Box 44354, Claremont, 7735, South Africa, United Kingdom– Blue Sky Publications Ltd – Company Registration Number: 04683692. This is due to the fact that government has not adjusted the tax brackets this year. Our offices are for administrative purposes only, no visitors will be accepted without an appointment. The South Africa Income Tax Calculator is designed for Tax Resident Individuals who wish to calculate their salary and income tax deductions for the 2021 Tax Assessment year (1 March 2020 - … Despite this complexity, there is a robust method by which to devise an informed and scientifically formulated salary increase forecast, which can be employed during the budgeting process. Given this, we will continue to revise our projections over the coming months. However, as a result of low growth, adverse business conditions and affordability, our recommended salary increase for 2020 remains unchanged: Forecasts can change significantly on the back of incoming data. This remains R310 for the first two members in your household, and R209 per person thereafter.) The highest earners are raking it in, whereas a majority of workers can only aspire to reach a figure above the R20 000 mark. Despite what lies ahead of us, the latest figures from StatsSA reveal that the average wage for workers in South Africa has increased in 2020. by Tom Head 05-04-2020 15:07 TheSouthAfrican.com is all about South Africa and the stories that affect South Africans, wherever they are in the world. Average Salary in South Africa. Forecasts can change significantly on the back of incoming data. Cost Of Living: R42,244 Extra: You may find this article also interesting to read: 15 Highest Paying Jobs in South Africa 2020 10 Most Expensive Cities in South Africa The most recent data issued for this year shows a fractional increase on a quarterly basis and there’s even a jump of almost 5% on a yearly axis. At the January MPC meeting, the new forecast for inflation was 4.7% for 2020; significantly lower than the previous 5.1%. However, most importantly, it negatively impacts the profitability of most, if not all companies, in South Africa; A possible downgrade in the country’s rating will only exacerbate the lack of growth; Most if not all companies are finding it difficult to pass on the rising input costs to consumers which concomitantly reduces profitability; Last year’s Budget did not increase the income tax brackets in line with inflation. The data presented above supports this “rule of thumb” method, given that over the last 17 years the average real increase granted by companies was 1.7%. There was also some rosy data for employment.