It appears that take-home pay numbers in South Africa are returning to normal levels, said BankservAfrica. A slight increase in Take-Home Pay Index (BTPI) was recorded for September. Despite the slight increase recorded, BankservAfrica warned that the next few months are likely to reflect the ‘new normal’ for salaries in SA.
An increase of 2.1% for September saw nominal average take-home pay at R14,008. Taking inflation into account, in real terms, take-home pay was down 1.4% from a year ago. BankservAfrica’s Shergeran Naidoo said that despite the year-on-year decrease, it seems that salaries are moving in the right direction indicating that “the worst is hopefully behind us”.
economists.co.za‘s chief economist Mike Schüssler said that data reflects South Africa’s take-home pay ‘normalising’, as fewer Covid-19 UIF TERS payments were made and the number of workers paid were at levels closer to those typically displayed in the monthly index. “There are, however, still several TERS as well as late TERS payments in the system – but these are far fewer than before,” Schüssler said.
Total cumulative salaries paid increased by 2.1% according to the BTPI data but Shüssler said that some relief payments in the system, the redirection of pension funds to supplement incomes, as well as UIF and TERS parents, may have contributed to the increase.
Meanwhile the PIT data for August which shows the SARS Personal Income Tax showed a steep decline of 22% in collections. Similarly, BankservAfrica’s total salary payments for July 2020 showed a decline of 35%. “Both sets of data reflect the worst declines on record – and there are differences. For the BTPI, this can be explained by the job losses and the temporarily laid off lower paid income earners such as hotel, tourism and restaurant staff. The job devastation experienced by casual workers in industries ranging from construction to personal transport services also contributed to this,” Schüssler explained.
“One, however, cannot be certain that the numbers will return to what they were before the Covid-19 lockdown for the BankservAfrica Take-home Pay Index. But early indications suggest the labour market appears to be moving in the right direction.”He said that it seems as if consumer spending will continue to climb slowly, based on the recovery trend that the cumulative take-home pay numbers in the BTPI numbers show. “But with consumer confidence being obliterated by the lockdown, it will be interesting to watch the movements in the months to come and as we approach the major annual shopper’s days of Black Friday, Cyber Monday and the festive season.”