The Payinc Net Salary index for July released on Wednesday indicated an increase in the Net Salary Index, its first monthly increase in nine months which bodes well for consumers who have been negatively impacted by the rising costs of inflation and petrol prices.
The Index tracks the take-home pay of approximately 2.1 million South African salary earners.
Shergeran Naidoo, Head of Stakeholder Engagement at PayInc, said the average nominal net salary increased further to R21,642 in July, 0.2% higher than in June, and up by 2.2% compared to a year ago.
PayInc said nominal net salaries increased by only 1.6% in the first seven months of 2026, compared with a 3.7% increase for the full year in 2025, reflecting strain in the labour market.
Elize Kruger, Independent Economist, said while the continued increase in nominal net salaries is encouraging, the broader picture shows that salary growth remains subdued.
“South African households continue to navigate a challenging economic environment, making the recovery in purchasing power particularly important for consumer confidence and spending.”
PayInc added that after steadily rising during the first half of the year, consumer inflation moderated to 4.3% in July from 5.0% in June, marking its first decline in five months.
“Notable reductions in fuel prices during July contributed to the improvement and provided some relief to consumers. The lower inflation reading also positively influenced real net salaries. The PayInc Net Salary Index increased by 0.4% month-on-month in real terms in July, its first monthly increase in nine months.”
PayInc said that at R20,269 in July, the index remained 2.2% below year-ago levels, while year-to-date statistics suggest that net salaries are down by 2.1% in real terms.
Kruger added that the moderating inflation contributed to the first monthly improvement in real net salaries in nine months. “However, purchasing power remains weaker than a year ago.”
PayInc said that salary trends continue to reflect the challenging operating environment facing South African businesses.
“The impact of weaker economic conditions, higher input costs, and pressure on company profitability has constrained salary expectations, although wage outcomes differ considerably across sectors. According to the South African Reserve Bank (SARB), average private sector salary increases moderated to 4% in 2025, from 4.1% in 2024, compared to an average of 5.4% in both 2022 and 2023.”
PayInc added that wage growth also varied considerably between industries. “In the fourth quarter of 2025, nominal remuneration growth per worker ranged from 4.6% in manufacturing to 8.8% in gold mining, reflecting the uneven salary environment across the economy.”
Kruger said: “Businesses facing pressure on profitability tend to postpone investment decisions, while there is less scope for meaningful salary increases in a strained environment, which is increasingly reflected in the subdued growth in private sector remuneration.”
PayInc said that the experience of public sector employees has differed markedly from that of private sector workers.
“The SARB data indicates that average public sector remuneration increased by 8.6% in 2025 and 9.1% in 2024, translating into real increases of more than 5% in both years. By comparison, private sector remuneration growth has been considerably more moderate.”
Kruger said that July represents a welcome improvement, particularly after nine consecutive months without monthly real salary growth, but the pressure on households has not disappeared. “A sustained recovery in purchasing power will depend on stronger salary growth, contained inflation, and, importantly, an improvement in the broader economic and employment environment.”
Professor Waldo Krugell, an economist at North-West University, said: “When nominal salaries are not growing fast because the economy is not growing fast, low and stable inflation at least means that buying power is being maintained. It seems that this slight decrease in inflation is going to be short-lived, and there are more fuel price increases on the way.”
yogashen.pillay@nationalmg.co.za