According to the latest BankservAfrica Disposable Salary Index (BDSI), the salaries of middle to high income earners continue to grow in spite of significant stagnation in the economy.
Although monthly salary payments of R100 000 or more are not considered when compiling the BDSI, the BankservAfrica salary data does indicate that the number of people earning at this level per month has skyrocketed year on year by an astonishing 84% in February and 27% in April, says Brad Gillis, CEO regulated products at BankservAfrica.
“The nominal BDSI for April 2014 is exactly R11 200, which is 7,1% higher than a year ago. This means salaries have grown by 1% in real terms when inflation and other factors are taken into account.
“This is in line with data we have analysed over the last 10 months where South Africa has seen positive real salary increases, although this growth has remained under 1% since the beginning of 2014.”
Gillis explains that, on average, total salary pay outs of those at work increased by 1,2% in real terms. “That was, however, mainly on the back of higher payments to those earning over R100 000 per month, which we do not include in the BDSI.
“Moreover, the March payments in the highest salary category that we monitor – being the over R100 000 per month bracket – increased in value by 38% year-on-year. In April, this category increased by 39% year on year, partly due to 27% more people falling into this category from a year ago.
Mike Schüssler, chief economist of economists.co.za, explains that this increase in salaries among high income earners at least partly off-set the effect of the platinum strike on the economy. The total amount paid out to this group reached R3,3-billion in March.
Gillis says that although the full effect of the strike is still difficult to gauge at present, the estimated number of people who received payments via the BankservAfrica system seems to have declined by 3,5% in April compared to a year ago.
The median take-home pay via the BankservAfrica system remains between R8 000 and R9 000. Salaries of more than R9 000 per month go to 46,2% of earners, while more than 41% take home over R10 000 per month.
The “median” person refers to the “typical” person, where 50% of these people earn more, and 50% earn less. The “typical” person is earning between R8 000 and R9 000 per month, every month. The average is actually higher.
This “typical” person must be earning close to R 9 000, as 46,2% of people getting paid via the BankservAfrica system earn more than R9 000 per month in their bank account (after taxes, pension, etc. have been deducted).
“On the salary side of the BankservAfrica data, it seems that the median is at least keeping pace with inflation. Generally, those employed in the private sector continue to see good increases – especially those earning above the average of R11 200 per month,” says Schüssler.