July sees drop in average take-home pay amid soaring costs in South Africa

The average nominal take-home pay in South Africa declined in July 2025, according to the latest BankservAfrica Take-home Pay Index (BTPI), which tracks salary payments of roughly 3.8 million earners.

“The nominal average take-home pay reached R17 144 in July 2025, 1.1% lower than the R17 339 reflected in June 2025 and a significant 6.9% lower than in February 2025,” said Shergeran Naidoo, BankservAfrica’s Head of Stakeholder Engagements.

However, a comparison between average headline inflation and the nominal average increase in the BTPI since 2017 suggests that salaries have recovered, but not fully after the weak years between 2021 to 2023.

Despite the moderation evident in recent months, for the year as a whole, the average nominal take-home pay will most probably still be notably ahead of 2024.

Inflation is forecast to average 3.5% in 2025 (vs 4.4% in 2024), and industry information suggests an average salary increase above 5%, making 2025 the second consecutive year of a real increase in earnings.

Yet, salaried earners continue to grapple with the higher cost of living.

“This impact is felt more sharply in July – the month notorious for annual municipal tariff increases – and serves as a stark reminder that some costs continue to rise well above the country’s inflation rate,” said Elize Kruger, independent economist.

Old Mutual chief economist Johann Els expects inflation to rise moderately to around 4% by December, while Investec chief economist Annabel Bishop previously forecast 3.3% year-on-year for 2025.

In real terms, take-home pay fell 0.9% month-on-month to R14 660 in July, down from R14 798 in June, though it remains above year-ago levels.

The BTPI calculates average take-home pay by dividing total salary payments into employees’ bank accounts (excluding those above R100 000 per month) by the number of payments.

It also reflects underlying labour market trends.

Data for the first seven months of 2025 shows fewer salaries in the R40 000–R100 000 range, suggesting job losses in higher-income categories.

At the same time, most additional salary payments were in lower categories, particularly up to R10 000 per month and between R20 000–R30 000.

“Additional salaries at lower levels and losses at the higher income side could partly explain the depressed trend in the average,” said Kruger.