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There has been an ongoing decline in the number of salary payments going through the South African banking system, which could point to retrenchments, economist Mike Schüssler told Fin24 on Thursday.
He was commenting on data from the latest BankservAfrica Take-home Pay Index, released on Thursday.
February was the eighth consecutive month of declining employees on the system.
For Schüssler, this is likely an indication that the current employment figures remain relatively lower than previous years.
The total take-home salaries paid - as measured by BankservAfrica - declined by 9.1% in total nominal terms and on a year-on-year (y/y) basis in February.
The data indicates that many people seem to have "left" the system, particularly higher earners. The overall number of employees earning under R100 000 per month declined by 8.4% in February.
Schüssler explained that "leaving the system" can happen in a number of ways, such as retrenchments or retirement, or perhaps payments are no longer going through the SA banking system.
The index is not designed to measure employment numbers - as people can still get paid in cash or by cheque, or can make use of a system where employees' salaries do not show up as a salary but as a normal payment. Yet, to Schüssler, the index has shown a trend developing for some time now.
"While we do not proclaim our total salaries are the total compensation paid in the SA economy, we do have a close relationship with the personal income taxes (PIT) collected by the SA Revenue Service (SARS) – at least on the percentage change measure," said Schüssler.
He noted that the SARS collection of PIT is also showing a slowdown on a smoothed basis.
"The data indicates there are fewer people working and that less tax is being paid despite the effective 3% to 4% PIT hike over the last year and salaries increasing close to 6%," said Schüssler.
"Even conservatively speaking, one would have at least expected an 8% increase in PIT on a nominal basis without having to account for more personal taxpayers."
To him, this suggests that PIT collections could well disappoint in the near future.
Schüssler added that load shedding in February could also have impacted the data. It may have resulted in some weekly and daily paid employees not being able to work and, therefore, not getting paid.
It may also have led to some system changes where, for example, a person paid weekly may have only been paid in the next week along with that week's wage.
