South Africa’s salary earners came under renewed pressure in April 2026 as weakening earnings growth, rising inflation and growing economic uncertainty weighed on household finances.
This is according to the latest PayInc Net Salary Index, which tracks the average nominal net salaries of approximately 2,1-million salary earners in South Africa.
“The average nominal net salary declined to R21 228 in April 2026. This represents a 0.6% decrease from March, and a 0.5% decline compared to April 2025,” says Shergeran Naidoo, head of stakeholder engagement at PayInc.
The decline marks a notable shift following two years of relatively strong salary growth in 2024 and 2025, where earnings broadly kept pace with inflation.
“The sharp deterioration in the economic outlook following the Middle East war outbreak is already filtering through to the labour market,” says independent economist Elize Kruger. “Companies are facing heightened uncertainty around profitability, costs and planning, and this is beginning to place pressure on earnings growth and employment prospects.”
With inflation accelerating and nominal salary growth weakening, real salaries declined even further. In inflation-adjusted terms, the PayInc Net Salary Index fell by 1,2% month-on-month and by 2,7% compared to April 2025, reaching R20 244, the lowest real salary level recorded in two years.
The worsening inflation outlook has been largely driven by fuel price spikes in April and May, reversing expectations for a more favourable inflation environment at the start of 2026. South Africa’s headline inflation rate increased to 4% in April – the highest level since August 2024 – while May inflation is forecast to rise further to around 4,6%.
“The combination of slowing salary growth and rising inflation is creating a difficult environment for salary earners,” says Kruger. “Households are being squeezed from multiple directions at the same time, with higher fuel prices, rising living costs and the growing possibility of higher interest rates.”
The South African Reserve Bank’s Monetary Policy Committee (MPC) is expected to remain cautious as inflation risks intensify. With inflation forecasts for 2026 and 2027 remaining above the SARB’s newly adopted 3% target, the possibility of an interest rate hike announcement later this week has increased.
Should interest rates rise further, salary earners are likely to face additional pressure through higher borrowing costs, further eroding disposable income.
At the same time, broader economic conditions remain weak. South Africa’s economic growth outlook for 2026 is forecast at only 1,1%, limiting prospects for meaningful job creation and stronger wage growth.
“The labour market has already started 2026 on the back foot,” says Kruger. “Employment declined by 345 000 in the first quarter of the year, with job losses reported across the formal, informal and household sectors. This reinforces concerns that businesses may move into a more defensive position in the months ahead.”
South Africa’s unemployment rate increased to 32,7% in the first quarter of 2026, up from 31,4% in the previous quarter.
While some employers have continued to grant above-inflation salary increases, businesses are increasingly looking to offset rising staffing costs by reducing discretionary employee benefits.
According to the latest Remchannel Salary and Wage Movements Survey, South African employers that participated in the survey reported average salary increases of 5,4% over the past year. However, many companies are simultaneously restructuring or reducing non-statutory benefits such as guaranteed bonuses, work-from-home concessions and fully paid parental leave.
“With uncertainty around the global and local economic outlook expected to persist for some time, many businesses are likely to adopt a wait-and-see approach,” says Kruger. “This could negatively impact investment decisions, workforce expansion and earnings expectations for the remainder of 2026.”