South Africa’s economic landscape is experiencing a nuanced shift, with BankservAfrica revealing that the average nominal take-home pay declined in March 2025.
The figure slipped to R17 811 from February’s R18 272, marking a 2.5% decrease.
Despite this dip, when compared to R15 983 just a year ago, the average remains buoyed above last year’s levels—highlighting both resilience and the effects of ongoing economic pressures.
Shergeran Naidoo, head of stakeholder engagements at BankservAfrica, addressed the declining nominal pay, attributing it to intensifying economic headwinds that are impacting growth and consumer confidence.
“This raises concerns over potential impacts on employment and earnings in the coming months. However, Thursday’s announcement to scrap the proposed VAT increase offers some reprieve,” Naidoo said.
Elize Kruger, an independent economist affiliated with BankservAfrica, noted a tempered outlook moving forward, referencing both escalating trade tensions and growing political uncertainty as significant factors likely to affect consumer sentiment and, ultimately, the economy.
As real take-home pay, adjusted for inflation, also softened by 2.9% to R15 343, the challenges faced by salary earners in March are palpable—though notably, this figure still reflects an 8.1% increase over the previous year.
2024 saw a significant moderation in consumer inflation, allowing salary earners a respite in their purchasing power. With the Consumer Price Index (CPI) dipping to a mere 2.7% in March—its lowest levels since June 2020—the outlook for 2025 appears cautiously optimistic.
Kruger anticipated that if inflation remains under control, the current pattern of positive real take-home pay growth could persist, bolstering demand for goods and services in the economy.
“This relief is much needed, as salary earners remain under strain from the high cost of living, persistently elevated interest rates, and additional tax burdens stemming from the unchanged tax brackets in the 2025 National Budget,” added Kruger.
The withdrawal of the proposed VAT hike by the Ministry of Finance has been described as a welcome development for consumers already faced with financial strains.
On a broader scale, the effects of global economic instability, exacerbated by trade conflicts—particularly those instigated by US tariffs—are anticipated to ripple through the South African economy.
Although the direct impact on total exports is limited, sectors reliant on duty-free access to US markets, such as automotive and agriculture, may face significant challenges, subsequently affecting employment and earnings stability.
Efficient Dawie Roodt, chief economist at the Efficient Group, said that take-home pay was determined by how well the economy is doing.
“Currently the South African economy is not doing well. Estimates for the economic growth are being adjusted downwards and yesterday the IMF also reduced estimates for the rest of the year. If the economy grows, the take-home pay will increase as well,” Roodt said.
Waldo Krugell, an economics professor at the North-West University, said that in terms of the year-on-year improvements, in real terms, it was good news for consumers and speaks to the importance of low and stable inflation.
“I can see how those uncertainties can weigh on consumer confidence, particularly when it comes to buying durable goods.”
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