Net salaries remained unchanged in October - PayInc Net Salary Index

Net salaries remained unchanged in October, according to the PayInc Net Salary Index, which tracks the average nominal net salaries of around 2.1 million South African earners. The index moved sideways during the month but remained higher year-on-year, signalling stronger spending ahead of the year-end shopping period. However, companies continue to face pressure as productivity fails to keep pace, strengthening the case for greater technology adoption.

“The PayInc Net Salary Index held steady at R21 414 in October, maintaining a 1.8% year-on-year increase,” said Shergeran Naidoo, the head of Stakeholder Engagements at PayInc. The upward trend in net salaries continued through 2025, with the average nominal net salary rising 4% in the first ten months, compared to 4.6% in the corresponding period in 2024.

In real terms, the PayInc Net Salary Index declined by 0.2% month-on-month to R20 685 in October 2025. This marked the fourth consecutive month in which real net salaries fell below year-ago levels, reflecting a gradual uptick in consumer inflation, which rose from 2.7% in March to 3.6% in October. Still, with consumer inflation averaging 3.2% in the first ten months of 2025, the average real net salary is up 1.0% compared to the same period in 2024.

“With average consumer inflation forecast at 3.2% in 2025, compared to 4.4% in 2024, and industry data suggesting an average salary increase of around 5%, 2025 will likely be the second consecutive year of real increase in earnings,” said independent economist Elize Kruger. “This is a welcome tailwind for salary earners, potentially supporting consumption expenditure during the upcoming Black Friday and Festive Season shopping period.”

Supporting data shows that real final consumption expenditure by households in the first half of 2025 was 2.9% higher than in the corresponding period of 2024—well above the 0.8% GDP growth recorded over the same period.

Analysis of the PayInc data sample indicates that additional salaries were paid in 2025, suggesting increased employment opportunities. This trend aligns with Stats SA’s latest Labour Force Survey, which reported that 248 000 jobs were created in quarter three. However, year-on-year job creation slowed to 109 000, consistent with PayInc data showing 125 000 additional salaries paid in the ten months to October.

“While encouraging, at the current sluggish economic growth rate of around 1% to 1.3% per annum, the economy is simply not creating enough opportunities to absorb all new entrants into the job market on an annual basis,” Kruger added.

Low productivity growth continues to drive cost pressures for businesses, making productivity improvements essential. “The fact that productivity growth still lags salary growth points to cost pressures at a company level. This will become more pronounced in an environment of low inflation, where the pricing power of companies will probably drift, given the adoption of a new inflation target as the norm for the economy,” Kruger said.

According to the South African Reserve Bank (SARB), labour productivity growth in the formal non-agricultural sector decelerated from 1.2% in quarter four (Q4) 2024 to 1.1% in quarter one (Q1) 2025 as growth in non-agricultural output slowed slightly, while employment remained broadly unchanged. Nominal unit labour cost growth also moderated—from 3.3% in Q4 2024 to 3.0% in Q1 2025—as remuneration growth slowed more sharply than output growth.

“An increase in productivity remains an important key to lifting company profits and opening the door for expansion and job creation down the line,” Kruger said. “The adoption of new technologies and faster payments could play a pivotal role in pushing productivity higher.”

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