Although salaries seem to be decreasing now, economists still believe that 2025 will be a better year for take-home-pay.
Salaries decreased in July as it started showing the strain in the job market, while inflation also increased in July by 0.5% to 3.5% in the month that municipal rates increases also came into effect.
According to the latest BankservAfrica Take-home Pay Index (BTPI), which tracks the monthly salary movements of approximately 3.8 million South Africans, the latest salary payments data reveals the pressure on workers caught between a weak job market and increasing municipal rates and food prices.
“The nominal average take-home pay reached R17 144 in July 2025, 1.1% lower than the R17 339 reflected in June 2025 and a significant 6.9% lower than the salaries in February 2025,” Shergeran Naidoo, BankservAfrica’s head of stakeholder engagements, says.
ALSO READ: June salaries stabilised after months of decline, but adverse external factors remain
Lower salaries show current employment trends
Although the slowdown in 2025 is concerning, the data also points to the current employment trends, Elize Kruger, an independent economist, says.
“Given that the BTPI is based on the total value of salaries paid into employees’ bank accounts, excluding those above R100 000, divided by the number of salary payments, it not only tracks pay levels but also reflects the underlying movements in the labour market.”
She points out that a trend in the first seven months of 2025 partly explains the moderation. “Salary payment data, excluding weekly and bi-monthly wages, shows fewer salaries in the range of R40 000 to R100 000, pointing to job losses in higher income brackets.
“At the same time, most new salary payments were concentrated in lower categories, particularly for the range under R10 000 per month and between R20 000 and R30 000. Therefore, additional salaries at lower levels and losses at the higher income side could partly explain the depressed trend in the average.”
ALSO READ: Latest petrol price increase puts SA consumers on backfoot again
Salaries still expected to be higher in 2025
Still, she says, the average nominal take-home pay for 2025 is expected to end notably higher than in 2024, making this, on balance, a positive salary year despite the risks in the broader economic outlook.
In real terms, take-home pay also moderated further by 0.9% month-on-month to R14 660 in July 2025, compared to R14 798 in June and Kruger says 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 says 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.
However, she points out that 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.
ALSO READ: Salary survey shows gap between increases and inflation narrowing
Higher cost of living eating salaries
“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. It serves as a stark reminder that some costs continue to increase well above the country’s inflation rate.
“Municipal tariffs are typically not reflective of a competitive environment, but instead mirror the realities within local authorities, which in many cases include inefficiencies, lack of maintenance, cross-subsidisation and corruption activities, all eroding available capital for service delivery.”
She says municipal services in Johannesburg are notably up on 2024 levels and far above the current inflation rate. A similar scenario plays out in other metros.
“This trend shows that administered prices will remain a key obstacle to bringing inflation expectations closer to the 3% target.”