South African salary earners saw a further modest improvement in nominal net salaries in July 2026, although ongoing economic pressures continue to constrain salary growth and household purchasing power.
This is according to the latest PayInc Net Salary Index, which tracks the take-home pay of approximately 2,1-million South African salary earners.
“The average nominal net salary increased further to R21 642 in July, 0,2% higher than in June, and up by 2,2% compared to a year ago,” says Shergeran Naidoo, head of stakeholder engagement at PayInc.
However, nominal net salaries increased by only 1,6% during the first seven months of 2026, compared with a 3,7% increase for the full year in 2025, reflecting the ongoing strain in the labour market.
“While the continued increase in nominal net salaries is encouraging, the broader picture shows that salary growth remains subdued,” says independent economist Elize Kruger. “South African households continue to navigate a challenging economic environment, making the recovery in purchasing power particularly important for consumer confidence and spending.”
After steadily rising during the first half of the year, consumer inflation moderated to 4.3% in July from 5.0% in June, marking its first decline in five months. Notable reductions in fuel prices during July contributed to the improvement and provided some relief to consumers.
The lower inflation reading also positively influenced real net salaries. The PayInc Net Salary Index increased by 0.4% month-on-month in real terms in July, its first monthly increase in nine months.
However, at R20 269 in July, the index remained 2.2% below year ago levels, while year to date statistics suggest that net salaries are down by 2,1% in real terms.
“The moderating inflation provided some breathing room for salary earners in July and contributed to the first monthly improvement in real net salaries in nine months,” says Kruger. “However, purchasing power remains weaker than a year ago, and this continued erosion has implications for household spending and consumer confidence.”
The relief could also prove temporary. Renewed geopolitical tensions in the Middle East have placed upward pressure on international oil prices, raising the prospect of higher domestic fuel prices and renewed inflationary pressures.
Wage growth reflects a strained labour market
Salary trends continue to reflect the challenging operating environment facing South African businesses. The impact of weaker economic conditions, higher input costs and pressure on company profitability has constrained salary expectations, although wage outcomes differ considerably across sectors.
According to the South African Reserve Bank (SARB), average private sector salary increases moderated to 4% in 2025, from 4,1% in 2024 compared to an average of 5,4% in both 2022 and 2023.
Wage growth also varied considerably between industries. In the fourth quarter of 2025, nominal remuneration growth per worker ranged from 4,6% in manufacturing to 8,8% in gold mining, reflecting the uneven salary environment across the economy.
“Salary growth cannot be viewed separately from the health of the broader economy and labour market,” says Kruger. “Businesses facing pressure on profitability, tend to postpone investment decisions, while there is less scope for meaningful salary increases in a strained environment, which is increasingly reflected in the subdued growth in private sector remuneration.”
Meanwhile, the experience of public sector employees has differed markedly from that of private sector workers. The SARB data indicates that average public sector remuneration increased by 8,6% in 2025 and 9,1% in 2024, translating into real increases of more than 5% in both years.
By comparison, private sector remuneration growth has been considerably more moderate.
Across the economy, the SARB recorded average nominal remuneration growth of 5% in 2025, marginally below the 5,2% recorded in 2024. In real terms, average remuneration increased by 1,9% in 2025 and 1,5% in 2024, supporting consumer spending during these periods.
Unionised employees have also typically secured higher wage increases than their non-unionised counterparts. According to Andrew Levy Employment Publications, the average wage settlement rate in collective bargaining agreements remained at 5,7% in the first quarter of 2026, compared with an overall average of 5,8% during 2025.
A challenging year remains
Despite July’s improvement, year-to-date trends suggest that 2026 remains a challenging year for South African salary earners. Nominal salary growth is tracking below the pace recorded in 2025, while higher inflation has already eroded the real value of earnings during the year.
“July represents a welcome improvement, particularly after nine consecutive months without monthly real salary growth, but the pressure on households has not disappeared,” says Kruger. “A sustained recovery in purchasing power will depend on stronger salary growth, contained inflation and, importantly, an improvement in the broader economic and employment environment.”