South Africa’s salaries improved by 3% year-on-year in real terms in October 2020, according to the latest BankservAfrica Take-home Pay Index (BTPI).

With most of the volatile period for salaries paid over the Covid-19 period nearing an end, a clearer picture of salaries in South Africa is emerging.

“With Covid-19 UIF TERs payments winding up in September 2020 and the number of employees remaining far fewer than before for the extended October 2020 applications, the BTPI is in a better position to gauge the actual number of salaries paid,” explains Shergeran Naidoo, BankservAfrica’s head of stakeholder engagements. “The average take-home pay was R14 773 in nominal terms, representing a 5% monthly change from September 2020.”

The annual comparison of the number of salaries paid continued declining. “There was a 10,4% decline between October 2020 and October 2019. This is deeper than what our data showed in September but far less than the 34% experienced in July 2020,” says Naidoo.

According to the BTPI data, the most affected income earners during the Covid-19 pandemic were those taking home R30 000 and below.

“At the start of the Covid-19 lockdown, daily and weekly workers were hurt the most with salary numbers dropping to extremely low levels,” explains Mike Schüssler, chief economist at “This is similar to what is being experienced around the world where lower-end income earners were hit the hardest.”

July and June showed the highest number of declines in salaries paid compared to April – which was the mildest, but this is due to payments to employees and employment figures lagging economic events by a month or so. Added to this are the payrolls, which are predefined by a month or two. “The worst economic numbers were recorded in April but the worst salary numbers reflected in July, three months later,” says Schussler.

Although UIF payments were not included in our numbers, the BTPI was able to show that employment in the formal sector was impacted negatively during the crisis. This has since improved but a full recovery is not on the cards soon.

“The above increase in average take-home pay, despite the decline in the number of salaries, resulted in total salaries decreasing by 0,1% in nominal terms in October 2020,” says Schüssler. “The few remaining TERS payments may help consumer spending.

“But, when these and the extra SASSA payments cease, we may see the real damage of the pandemic to our economy, through salaries. It seems that as the economy settles after the lockdown upheaval, the real damage to personal incomes’ is starting to emerge.”

For the fourth consecutive month, private pensions paid into bank accounts in South Africa increased above the rate of inflation, according to the monthly BankservAfrica Private Pensions Index (BPPI). Although the 1,9% monthly real increase is the lowest in four months, it reflects the average private pension is still increasing.

The average real pension was R7 322, which was 57.4% of the average real take-home pay. To put that into context, at the start of the BPPI, the average private pension was only 47% of the average salary. “Private pensions have generally increased quicker than salaries over the last eight years,” says Schüssler.