BankservAfrica’s Take-home Pay Index (BTPI), which tracks the average nominal take-home pay of around 4 million salaried individuals in South Africa, concluded 2024 with strong results, demonstrating a continuation of the upward trend observed throughout the year.
“The average take-home pay increased by 11.9% year-on-year, reaching R17,202 in December 2024,” said Shergeran Naidoo, BankservAfrica’s head of Stakeholder Engagements. “This marks a notable increase from the R15,367 recorded in December 2023.”
The steady rise in average salaries was apparent throughout the year, despite some monthly fluctuations.
“The BTPI highlighted 2024 as the most significant salary growth year since 2020,” said Elize Kruger, independent economist. “This positive trend was supported by an improving business environment, the suspension of load shedding, moderating inflation, political shifts, and two interest rate cuts. Additionally, enhanced company profitability, reflected in an increase in gross operating surplus, further boosted salaries.”
In 2024, nominal take-home pay rose by 7.9%, marking the highest growth rate in recent years. However, it’s important to note that this increase comes after two challenging years, as 2022 and 2023 saw minimal salary growth. With inflation easing considerably in 2024, employees enjoyed better purchasing power in real terms.
“This recovery in disposable income is reflected in stronger retail sales,” adds Kruger. “Real growth for retail sales in the eleven months to November 2024 was 2.4% higher than the same period the previous year, with positive growth also seen in passenger car sales.”
In real terms, take-home pay climbed to R14,887 in December 2024, marking an 8.7% increase from the previous year. With consumer inflation averaging 4.4% in 2024—the lowest rate since 2020—the purchasing power of South Africa’s salary earners significantly improved. Real take-home pay averaged R14,292 for the year, up 3.1%, signalling the first real increase since 2020.
Looking ahead, South Africa’s GDP is expected to grow by 1.7% in 2025, slightly higher than 2024, fuelled by stronger household consumption, higher investment spending, and structural reforms.
The continued focus on enhancing South Africa’s electricity generation capacity, addressing freight rail and port bottlenecks, and upgrading water infrastructure is expected to bolster the economy. These improvements could lead to more substantial salary increases in 2025.
The rise in purchasing power witnessed in 2024 is expected to persist into 2025, providing much-needed relief to households and further supporting consumer spending.
With consumer inflation easing from 5.3% in January 2024 to 3% in December, and an expected 4.2% average for 2025, employees can look forward to several years of real salary increases, leaving more room for discretionary spending.
The South African Reserve Bank’s latest Quarterly Bulletin reported a 5.2% nominal salary increase in the first half of 2024, compared to an average of 4.5% in 2023. With anticipated real increases, salary growth could reach around 5.7% in 2025, depending on factors like employer financial health, employee performance, and talent retention goals.
“With all these positive shifts, salaries are expected to continue building on the gains made in 2024 as we move into 2025,” said Kruger.