Real take-home pay shrinks due to higher inflation, says report
The average, real, seasonally adjusted banked salary declined by 1.3% to R13,964 in September, due largely to ‘difficult economic conditions’ in the country
Real disposable take-home pay shrank for the first time in seven months on a year-on-year basis due to higher inflation in September 2017, according to the monthly BankservAfrica Disposable Index released on Thursday.The average, real, seasonally adjusted banked salary declined by 1.3% to R13,964 in September. In nominal terms, the take-home salary averaged at R14,255.While these changes do not represent a complete reversal in the trend towards declining take-home pay levels, it has become evident that the lower growth rate in nominal and real terms is becoming the norm, the report said."The difficult economic conditions in the country at present impact firms and their ability to pay higher salaries. The effective tax rate on gross salaries is also taking a toll," BankservAfrica said.In effect, the sluggish economic growth is affecting wages in the following ways:• The net effect of higher taxes and inflation outpacing salary increases is less consumer spending in the next few month...
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