The average salary increase you can expect in South Africa in 2024 –

South African employers are forecast to increase pay by an average of 6.1% in 2024 in an attempt to attract and retain staff amid high inflation and a challenging labour market.

However, this optimistic prediction has proven different in practice, with average salary increases in the country consistently slowing down and sitting well below the inflation rate.

According to new research by global broking and solutions company WTW in their most recent Salary Budget Planning Report, (which had responses from 440 organisations across South Africa), it was found that the 6.1% raise planned for 2024 is slightly lower than the 6.6% actual average rise in pay budgets made in 2023.

WTW said the companies surveyed are considering raising their compensation budgets in 2024 for two primary reasons:

About 70% of the organisations attribute inflationary pressure as the reason, while nearly 44% responded that the increases are due to a competitive labour market, with companies aiming to attract and retain quality employees.

“It takes more than higher pay to attract and keep great talent, and the past few years have pressed companies to be more resourceful,” said Melanie Trollip, Director of Work and Rewards at WTW South Africa.

“Businesses are still grappling with inflationary pressures and a tight labour market, and these factors are pushing up salaries,” said Trollip. “The forecast rises for [2024] are slightly lower than what we have seen [in 2023], but overall, they are still at a relatively high rate.”

This forecast is higher than the global average of a 5.0% pay raise predicted in 2024.

The survey also showed that many companies in South Africa are feeling positive about the state of the economy. 34% of businesses stated that their outlook was better than anticipated, while 57% indicated that it was in line with their expectations.

As a result of this optimistic outlook, 16% of businesses said that they are planning to increase their workforce in 2024.

The study also found that 59% of employers are looking to hire engineers, 56% are seeking IT professionals, and 48% are interested in recruiting more salespeople.

Based on the latest average salary data from Statistics South Africa (StatsSA), the average salary in South Africa is now R26,086 a month or R313,032 annually.

If one were to earn the average salary and see a 6.1% increase, they would have an extra R19,095 in their pockets at the end of the year  – or R1,591.25 more every month.

The reality

Despite the intent to hike salaries in South Africa, salary indices from the latter months of 2023 show that the country is still battling with a declining trend in real incomes, with salary increases sitting well below the inflation rates.

According to a household finance note by Investec chief economist Annabel Bishop, average salary increases slowed in October 2023, to 1.8% y/y from 4.1% y/y in September – well below the 5.2% y/y inflation rate.

In real (inflation adjusted) terms October saw a -3.4% y/y drop in real take-home pay.

“The average real salary fell to R13,942 a month in October, from R14,226 in September, still on a declining trend from R16,124 in February 2021, weakening HCE (Household Consumption Expenditure) growth and so GDP growth,” said Bishop.

Consumer price index inflation also rose in October to 5.9% y/y, from 5.4% y/y in September and 4.8% y/y in August. This cuts into people’s real incomes as nominal take-home pay increases did not rise by the same amount.

Despite some economic sectors rebounding, recent widespread job cuts have been predominant as many executives seek to cut costs. The unemployment rate in the country remains worrisome, at 31.9%.

Read: 46 jobs that pay more than the R26,000 average salary in South Africa