Payinc Net Salary Index,released on Wednesday indicated that the average nominal net salary declined to R21 228 in April 2026 which represents a 0.6% decrease from March. Experts have raised concern that salary earnings are under pressure as inflation rises and salaries decline.
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South African salary earners are facing mounting financial pressure as weakening wage growth, rising inflation and economic uncertainty continue to squeeze household finances, according to the latest Payinc Net Salary Index released on Wednesday.
The index showed that the average nominal net salary declined to R21 228 in April 2026, marking a 0.6% decrease from March and a 0.5% decline compared to April 2025.
PayInc said the drop signals a turning point after two years of relatively stable earnings growth during 2024 and 2025, when salaries broadly managed to keep pace with inflation.
Shergeran Naidoo, head of stakeholder engagement at PayInc, said salary earners were now experiencing renewed strain as economic conditions worsened.
Naidoo added that the decline marks a notable shift following two years of relatively strong salary growth in 2024 and 2025, where earnings broadly kept pace with inflation.
“In inflation-adjusted terms, the Net Salary Index fell by 1.2% month-on-month and by 2.7% compared to April 2025, reaching R20,244, the lowest real salary level recorded in two years,” she said.
“The worsening inflation outlook has been largely driven by fuel price spikes in April and May, reversing expectations for a more favourable inflation environment at the start of 2026.”
Moreover, PayInc said that should interest rates rise further, salary earners are likely to face additional pressure through higher borrowing costs, further eroding disposable income.
Independent economist Elize Kruger said that the sharp deterioration in the economic outlook following the Middle East war outbreak is already filtering through to the labour market.
“Companies are facing heightened uncertainty around profitability, costs and planning, and this is beginning to place pressure on earnings growth and employment prospects.”
Kruger said that the combination of slowing salary growth and rising inflation is creating a difficult environment for salary earners.
“Households are being squeezed from multiple directions at the same time, with higher fuel prices, rising living costs and the growing possibility of higher interest rates.”
Kruger added that the labour market has already started 2026 on the back foot.
“Employment declined by 345,000 in the first quarter of the year, with job losses reported across the formal, informal and household sectors. This reinforces concerns that businesses may move into a more defensive position in the months ahead,” she said.
North West University Business School economist Professor Raymond Parsons described the latest salary index as another warning sign of the negative impact the global energy crisis and higher fuel prices are having on households.
“It suggests that, although the Monetary Policy Committee (MPC) may decide on a 25-basis-point interest rate increase on May 28, even a small rise could have a negative “megaphone” effect on business and consumer confidence,” he said.
“If interest rates rise further, it is inevitable that many salary earners will face additional erosion of their disposable income.”
Parsons added that ongoing uncertainty in both the domestic and global economy may encourage companies to adopt a “wait-and-see” approach to investment and employment decisions.
“While the MPC will want to raise interest rates if the so-called “second round effects” do emerge in the economy, the latest salary index suggests that such evidence is not yet apparent,” he said.
“Most other central banks have indicated that they will “wait and see” before raising rates in highly elevated uncertain economic circumstances.”
Professor Waldo Krugell, an economist at North-West University, said the latest figures reflected the difficult environment facing workers.
“The inflation rate has increased, but not by much. The bigger problem is slow economic growth and lots of uncertainty, which means that salary growth is also slow (and negative in real terms),” Krugell said.
“If the MPC raises the repo rate tomorrow, it will definitely have a negative impact on consumer spending, which will put businesses under further pressure.”
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