Believe it or not, you are likely to be earning slightly more than you did last May
Tax increases which took effect in April caused average take-home pay to drop by R124 in May, according to the monthly BankservAfrica disposable salary index released on Wednesday. May’s average take-home pay, however, was slightly higher than in the same month in 2016 — even with inflation. Personal taxes increased 8.8% over the year, outpacing a 6.4% growth in banked salaries. "As salary adjustments are largely based on the inflation rate, much of the increases in nominal salaries are taxed at higher tax rates. This makes it difficult for salaried employees to keep up their lifestyles as the higher tax rate impacts take-home pay," Economists.co.za chief economist Mike Schüssler, who compiles the index for BankservAfrica, said. Disposable income was also hurt by annual increases in medical scheme rates of 10.3% in May, reported by Statistics SA’s consumer price index. "Overall, it is likely that the disposable salaries’ underperformance will affect consumer confidence and drive sen...
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