Real net salaries rise for first time in nine months

South African net salaries improved marginally in real terms in July, the first increase in nine months — though they remain constrained by economic pressures which are also restricting households’ purchasing power.

The PayInc net salary index, which tracks the take-home pay of approximately 2.1-million South African wage earners, ticked up 0.2% month on month to R21,642 in nominal terms in July and was up 2.2% compared with a year ago.

It was also up 0.4% at R20,269 when factoring in inflation, though this was a 2.2% year-on-year decline.

The month-on-month improvement in real salaries reflected a slowdown in consumer inflation to 4.3% in July from 5% in June, which Statistics South Africa attributed to softer inflation for food and non-alcoholic beverages, lower municipal tariff increases and a decline in fuel prices.

But the PayInc report shows nominal salaries increased by only 1.6% during the first seven months of 2026 compared with a 3.7% increase for the whole of 2025, attesting to the ongoing strain in the labour market.

Purchasing power remains weaker than a year ago and this continued erosion has implications for household spending and consumer confidence

“While the continued increase in nominal net salaries is encouraging, the broader picture shows that salary growth remains subdued,” independent economist Elize Kruger said in her analysis of the data.

“South African households continue to navigate a challenging economic environment, making the recovery in purchasing power particularly important for consumer confidence and spending.”

Year-to-date statistics suggest that net salaries are down by 2.1% in real terms.

“The moderating inflation provided some breathing room for salary earners in July and contributed to the first monthly improvement in real net salaries in nine months. However, purchasing power remains weaker than a year ago and this continued erosion has implications for household spending and consumer confidence,” Kruger said.

The inflation relief could also prove temporary, with renewed geopolitical tensions in the Middle East keeping global oil prices volatile, raising the prospect of higher domestic fuel prices.