Despite a decline in overall employment figures, South Africa’s average earnings have outpaced inflation—giving workers real wage gains. However, salary experts are advising employees to manage their expectations going into 2025, as global and domestic economic challenges are likely to restrict significant salary increases.
According to the latest Quarterly Employment Survey (QES) by Statistics South Africa (Stats SA), average monthly earnings rose by 5.6% year-on-year to R28,289 between February 2024 and February 2025. This exceeds the inflation rate for February 2025, which stood at 3.2%, giving South African workers a real wage increase of 2.4%.
Despite this, the average monthly salary remains slightly below the record R28,316 seen in November 2024, suggesting stagnation or softening in wage growth over recent months. Furthermore, broader labour income trends point to weakening momentum in the job market.
Total gross earnings paid to employees fell by R47.3 billion (4.6%), from R1.03 trillion in December 2024 to R983.1 billion in March 2025, largely driven by declines in community services, manufacturing, trade, construction, transport, electricity, and mining.
Basic salaries and wages also dropped, falling R9.4 billion (1.1%) from R890 billion to R881 billion over the same period. Bonus payments followed the usual year-end dip but saw a year-on-year decline of R5.7 billion (6.9%) to R75.8 billion, highlighting shrinking discretionary spending by employers.
The only notable increases came from the business services sector, where gross earnings rose by R26.1 billion (2.7%), and the electricity industry, which reported a year-on-year earnings boost of R33.1 billion.
Despite these pockets of growth, broader employment indicators remain subdued. The formal sector continues to lose jobs, and overtime payments have also decreased—dropping R1.3 billion (4.7%) year-on-year to R26.3 billion in March 2025.
According to Lindiwe Sebesho, a reward specialist at the South African Reward Association (SARA), this context means employees should not expect substantial salary increases in the months ahead, even though recent data shows real earnings growth.
“While the inflation outlook has improved over the last few months, with CPI averaging 3.0% as of April 2025, the global economy remains uncertain,” said Sebesho. “There’s a lot happening both locally and globally that impacts employers’ ability to meet everyone’s salary increase expectations.”
Sebesho pointed out several challenges weighing on wage growth:
Stagnant GDP growth forecasts
Persistent high interest rates, increasing the cost of debt for businesses and individuals
Increased fuel levies, which affect operating costs across industries
Rising food prices, driven by droughts and climate-related factors
Trade instability, exacerbated by U.S. President Donald Trump’s renewed tariffs, which affect South Africa’s export partners and could trigger cost-push inflation locally
She emphasized that employers are likely to adopt a “muted” approach to salary adjustments, focusing instead on cost control and strategic pay management amid ongoing uncertainty.
Sebesho encouraged employees to shift focus from just monetary salary increases and instead consider total reward packages that include benefits such as:
Retirement fund flexibility
Medical aid support
Remote work policies
Paid leave enhancements
Employee wellness programs
“Review your entire remuneration package,” she advised. “Ask about non-monetary or money-saving benefits, including how you can flex your retirement benefits to help offset any immediate financial shortfall without compromising your long-term savings goals.”
In light of high living costs and limited job security, Sebesho stressed the importance of financial literacy and realistic expectations.
Employers, on their part, are also being urged to balance business sustainability with the need to retain and motivate talent—particularly in competitive and highly skilled industries.
The next quarter’s employment data and inflation forecasts will provide further clarity, but for now, both employers and employees are treading cautiously in a complex and unpredictable economic environment.
