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Johannesburg - The BankservAfrica Disposable Salary Index (BDSI) is up by 3.8% on a year-ago, but after inflation an actual decline is revealed, according to economist Mike Schüssler.
This is the fifth month in a row in which actual real disposable salaries declined on a year-ago basis, and the eighth time in the last nine months.
At present, South African employees are in the longest period of decline of real salaries since 2005, when our data series began.
While nominal disposable salaries are still increasing, these increases have averaged less than 5% over the last few months. This is a clear indication that disposable salaries are again not increasing as quickly as gross salaries.
The reason for this is likely to be deductions such as medical insurance, which has shown an increase of 10.2% year-on-year (Statistics South Africa) and personal income tax, which has also increased by over 10%, taking a higher amount of employees’ disposable salaries.
Research has shown that taxes, medical insurance, pensions and garnishee orders are the four biggest deductions from disposable salaries. They are followed by UIF and other statutory deductions, as well as loans in some cases.
It is estimated that these deductions take a chunk of over 30% from the average gross salary in South Africa.
The average disposable salary was R10 848 for the month of May, which was very similar to the January disposable salary of R10 440.
According to the BDSI data series, this year has seen one of the lowest rises in nominal terms in a very long time.
With the exception of December 2012, there has been an overall declining trend in real disposable salaries, indicating that households will remain under pressure and that on average South African consumers are in all likelihood having to cut back on their budgets.
The median disposable salary on a monthly basis remains between R6 000 and R7 000 per month for formal sector employees, while about 30% of employees earn the average disposable salary or more.
Based on the above-mentioned BDSI data, one would expect that the consumption part of the economy will only be maintained if further loans are made to consumers. However, there are signs that the total amount of salaries paid increased by a substantially greater margin.
The average pension payment going through the BankservAfrica payments system was R5 025 in May 2013 compared to R4 257 in May 2012.
On average, 655 000 private pensioners are paid via the system, which is about 20% of the estimated number of people who receive salaries via the BankservAfrica payment system.
It does, however, indicate that private pensions have increased from around 46% of total disposable salaries to around 48%, indicating that South Africans do not invest enough for their old age.
- Fin24
This is the fifth month in a row in which actual real disposable salaries declined on a year-ago basis, and the eighth time in the last nine months.
At present, South African employees are in the longest period of decline of real salaries since 2005, when our data series began.
While nominal disposable salaries are still increasing, these increases have averaged less than 5% over the last few months. This is a clear indication that disposable salaries are again not increasing as quickly as gross salaries.
The reason for this is likely to be deductions such as medical insurance, which has shown an increase of 10.2% year-on-year (Statistics South Africa) and personal income tax, which has also increased by over 10%, taking a higher amount of employees’ disposable salaries.
Research has shown that taxes, medical insurance, pensions and garnishee orders are the four biggest deductions from disposable salaries. They are followed by UIF and other statutory deductions, as well as loans in some cases.
It is estimated that these deductions take a chunk of over 30% from the average gross salary in South Africa.
The average disposable salary was R10 848 for the month of May, which was very similar to the January disposable salary of R10 440.
According to the BDSI data series, this year has seen one of the lowest rises in nominal terms in a very long time.
With the exception of December 2012, there has been an overall declining trend in real disposable salaries, indicating that households will remain under pressure and that on average South African consumers are in all likelihood having to cut back on their budgets.
The median disposable salary on a monthly basis remains between R6 000 and R7 000 per month for formal sector employees, while about 30% of employees earn the average disposable salary or more.
Based on the above-mentioned BDSI data, one would expect that the consumption part of the economy will only be maintained if further loans are made to consumers. However, there are signs that the total amount of salaries paid increased by a substantially greater margin.
The average pension payment going through the BankservAfrica payments system was R5 025 in May 2013 compared to R4 257 in May 2012.
On average, 655 000 private pensioners are paid via the system, which is about 20% of the estimated number of people who receive salaries via the BankservAfrica payment system.
It does, however, indicate that private pensions have increased from around 46% of total disposable salaries to around 48%, indicating that South Africans do not invest enough for their old age.
- Fin24
