Working less, earning more: The curious case of South Africa’s pay paradox

South African workers who kept their jobs in the second quarter of the year saw modest salary increases in the second quarter of 2025.

This comes even as the formal sector shed 80 000 positions between March and June.

Gross earnings paid to employees inched up just 0.2% during the quarter, reaching an overall figure of R986.8 billion in June, according to the Quarterly Employment Statistics survey released by Statistics South Africa yesterday.

Year-on-year, gross earnings grew 3.4%.

The gains were driven largely by basic salaries and wages, which rose 2.5% to reach R902.8 billion in the June quarter. This growth was evident across all major industries, including community services, business services, and trade.

Basic salaries and wages climbed 3.6% year-on-year.

Less bonus pay

However, bonus payments told a different story.

They plunged 25.4% quarter-on-quarter based on total figures for the three months to March and then to the three months to June.

The decline was driven by the business services, manufacturing, trade, and community services sectors, though transport, construction, and electricity industries all recorded bonus increases over the same period.

Year-on-year, bonus payments rose 5.1%.

Overtime pay

Overtime payments decreased 1% during the second quarter of 2025, despite increases in the trade, construction, and electricity industries. Year-on-year, overtime payments dropped 4.5%.

Average monthly earnings paid to employees grew 3.4% quarter-on-quarter, rising from R28 322 in February 2025 to R28 290 in May 2025, Statistics South Africa said.

Separate data from the PayInc Net Salary Index showed net salaries increased marginally in August 2025 to R21 222, up 0.2% on July's level and 2% higher than a year ago.

"The upward trend evident in net salaries during 2024 spilled over to 2025, with the average nominal net salary in the first eight months of 2025 up by 4.6% compared to the corresponding period in 2024," PayInc said.

Job losses accelerate

The salary gains come against a backdrop of accelerating job losses.

Total employment in the formal non-agricultural sector fell 0.8%, dropping from 10.59 million in March 2025 to 10.51 million by June 2025, Statistics South Africa said. Between June 2024 and June 2025, 229 000 jobs were lost.

The community services industry bore the brunt, shedding 53 000 jobs during the quarter.

Only mining and electricity bucked the trend, adding 2 000 and 1 000 jobs respectively.

Full-time jobs decreased by 44 000 during the quarter.

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Year-on-year, full-time employment fell by 55 000.

Part-time employment took a harder hit, dropping by 36 000 jobs to 1.096 million in June 2025.

Year-on-year, part-time employment plunged by 174 000 jobs compared to the corresponding quarter of 2024.

Lara Hodes, Investec economist, said a notable lift in business confidence, which slipped further in the third quarter of the year, is required to boost investment and economic growth, supporting the country's unemployment crisis.

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