What are people earning?

Johannesburg – The BankservAfrica Disposable Salary Index (BDSI) shows that take-home pay increased last month to the highest level since February 2015.

Take-home pay rose 9.1 percent, maintaining the upward trend of the last four months.

“This increase on a year ago is quite surprising as one would have expected that salary increases would be slowing in these tough economic times,” says Mike Schüssler, chief economist at Economists dotcoza.

“Usually we would see January, February and March disposable salaries drop as year-end bonuses no longer form part of the equation. Despite taking this into account, the average disposable income was still well over the rate of consumer price inflation on a year ago basis.”

The consumer price index – or the main inflation figure – in February 2016 was 7 percent, higher than a year ago, and outside the South African Reserve Bank’s target of 3 to 6 percent.

Dr Caroline Belrose, Head of Fraud and Data Analytics at BankservAfrica, adds, “even after inflation is taken into account, there was still a 2 percent real increase in take-home pay. This was the fourth month in a row that the increase in disposable income was higher than the inflation rate.”

Belrose explains the median or typical disposable salary, which is 74 percent of the value of the average salary, increased 9.2 percent on a year ago to R9 809.

At the current rate of increase, the typical salary will take about three and a half years to catch-up to the average salary. Average salaries tend to be higher as only a few employees earning high wages lift the average, whereas the typical salary is the amount paid to the employee in the middle of all the salary groups.