Average Salary in South Africa

South Africa is a paradise filled with fantastic natural scenery and a favourable climate in which to enjoy it all. It’s known for its multiculturalism with eleven official languages, has one of the strongest economies on the African continent, a good standard of living, not to mention it is home to the great Nelson Mandela. The two main cities for expatriation are Johannesburg and Cape Town, which are both huge cosmopolitan melting pots. These are some of the big draws for potential expatriates. This country welcomes foreign workers with the skills needed to fill gaps in the job market. But, before relocating, it’s important to understand the salaries offered in a particular country against the cost of living and see if you’ll be able to afford a decent lifestyle.

What is the average salary in South Africa? A South African employee typically earns around $12.36/hour, $2,144 a month, or $25,725 a year. All residents are subject to income tax. More detailed information on the tax system is available here. This brings the average net salary after tax to about $1,128.39/month. Note that $1=14.65 South African Rand (ZAR) as of 2019-11-30.

There are various occupations that one can adopt living in this ambitious country, depending on one’s passion and educational background. While the average gross pay in South Africa is $25,725 a year, people have different careers and they all paid differently. It’s vital to take a look at the average salaries by profession to help make a clear decision on which job to take. Here are the average annual salaries of some professions in South Africa:

Economic outlook

South Africa boasts one of the largest economies in Africa, accounting for almost a quarter of the continent’s GDP. As one of the most industrialised countries in the continent, growth is prevalent in the automotive, financial services, communication, as well as the emerging IT sectors. Other important economic sectors include mining and mineral processing, banking, and services. Although agriculture only plays a marginal role in the current economy, South Africa’s vineyards supply world-class wine across the globe.

The job market in South Africa

The retail industry is the biggest employer in South Africa with 18% of the workforce, but it also happens to be the worst-paying as 40% of the employees earn below the minimum wage. The call-centre industry is the second-biggest employer with 11% of the workforce. Banking and IT are the smallest employers with only 8% of the workforce but offer the highest salaries.

South African visas

As with most countries, foreigners must obtain work visas before being allowed to travel to South Africa for work. There are currently three different types of work visas you can take to work in this country. The most common type is the general work visa. The other two are critical skills visa and Intra-company transfer visa. You can take an assessment at Work Visa South Africa to determine which visa you’ll need.

How to find a job

The law requires all jobs to be advertised nationally and only open to foreign applicants if a suitable candidate isn’t available locally. You can check out local job classifieds in newspapers, online job portals, company websites, websites of embassies and consulates in SA, or sign up with a recruitment agency. Some jobs are filled by word-of-mouth, so networking can prove beneficial.

South Africa Average Household Income

Average household disposable income in South Africa is recorded every year with figures available from 1990 to 2018. Statistics show that in 2018, the figure was recorded at 34,207 ZAD ($2,335.03). Household disposable income measures the amount of net income a household has to spend, save, or invest after deducting income taxes. South Africa has one of the highest levels of income inequality in the world. The richest 1% of South African households earn about $3,330/month (after tax), while there’s a quarter of the population that lives below the poverty line.

Minimum Wage in South Africa

The South African labour law didn’t provide a national minimum wage (NMW) up until recently. This all changed in January 2019 when the NMW act of 2018 came into force. The minimum wage was set at 20 ZAD an hour, which translates to about 3,500 ZAD a month based on a 40-hour workweek. This figure applies to all workers except for employees in the National Intelligence Agency, Secret Service, and the National Defence Force.

Three other groups also have different minimum wages. This includes farm workers, domestic employees, and those on expanded public works programs at R18, R15, and R11 an hour respectively. The NWM Act also provides a minimum wage for employees who are part of a leadership program. This is, however, determined per week depending on the number of credits the learner has already earned.

This minimum wage will, however, not be imposed on firms in financial difficulty. Employers are allowed to apply for exemptions from the NMW Act for up to a year, a move which is by no means insignificant in a country where growth is stagnant. It’s, however, unclear as to the circumstances where an exception may be granted. Note that an employer who fails to comply with the NMW Act will face significant fines.

The national minimum wage is set to be reviewed every year to ensure it is having the desired effect. Introduction of the minimum wage has sparked debates. Supporters of the Act are convinced that it will mitigate inequality, reduce poverty, as well as encourage economic growth and development since people will have more disposable income and less credit. Critics, on the other hand, say that this move will lead to increased unemployment as some employers won’t be unable to afford labour.

Average Salary in the Capitals: Cape Town, Bloemfontein & Pretoria

South Africa doesn’t have a single capital city. Instead, it boasts three –one for each branch of the government. Cape Town is the legislative capital, Bloemfontein is the judicial capital, and Pretoria is the administrative capital.

With their diverse economy and developing infrastructure, these cities provide a wide variety of opportunities to expats seeking employment in South Africa. Not only are the chances of getting great positions very high, but foreign workers also reap the benefits of being employed in national and multinational giant companies. How much should you expect to make working in these cities though?

The average annual gross salary for Cape Town, Pretoria, and Bloemfontein are $29,898, $26,990, and $ 24,954 respectively. These cities offer some of the highest salaries in the country, along with Durban, Johannesburg, and Port Elizabeth. Given that these figures are just guides, salaries vary between professions, employers, and qualifications. Those with a tertiary qualification will find it easier to get jobs in these cities and even earn about 72% more than those without.

The job market

Call centres, office services, finance, real estate, and insurance are some of the biggest contributors to these cities’ economies. Tourism is another major economic pillar for the cities, offering thousands of residents a secure workplace in hotels, restaurants, and tourist attractions.

As with the rest of the country, the only problem of these attractive cities is widespread unemployment. As mentioned earlier, South Africa’s economy is localised in a few large areas, including these capitals. More and more people are leaving the countryside with the hope of finding a better life in large cities, which only fuels existing high unemployment rates.

However, the unfortunate widespread brain drain in these regions gives expats work opportunities. Highly skilled employees such as IT specialists, medical staff, and engineers are also in short supply, thus employers are open to hiring foreigners.

Cost Of Living in South Africa

It’s normal to want to know if you’ll be able to maintain or even better your lifestyle when considering expatriation. Now that you have an idea of what you can make working in South Africa, let’s compare it against the cost of living. The cost of living in South Africa is generally lower than most international expat destinations like Tokyo, New York, and London, but roughly at par with other African countries. Here’s what common household expenses will cost in South Africa:

Housing

Rental costs vary significantly between major cities and rural areas. A one-bedroom apartment will average at $432/month in the city centre while a three-bedroom apartment average at $882/month in the same area. Buying property is also an attractive option for expatriates with average prices ranging from $34,346 in low-income areas to $60,871 in high-income areas. Mortgages are available, but the rates tend to be higher for foreign residents. All housing costs become less expensive the further away from the city you live in.

Food

Food prices are fairly cheap compared to European countries, with local produce giving the greatest savings. Some retailers stock imported and speciality items although they can be expensive. Common supermarket prices include:

Milk (1L) – $0.95
White rice (1kg) – $1.38
Apples (1kg) – $1.51
Oranges (1kg) – $1.45
Local cheese (1kg) – $6.80
A loaf of bread (500g) – $0.88
A dozen eggs – $1.91
Chicken breasts – $4.67
Tomato (1kg) – $1.27

Transport

Public transport is available but it’s not as developed or reliable as it is in European countries. A one-way ticket on local transport costs about $1.29, while a monthly pass average at $40.75. Taxis start at $1.36 with an additional $0.68/km. Many South Africans choose to own a car. An average car will set you back about $20,000 and gasoline costs $1.07/litre.

Other costs

You’ll need to budget also for utilities, health insurance, clothing, entertainment, eating out, and much more depending on your needs and the lifestyle you’re looking for. Ultimately, the average person will spend about $495 while a family of four will spend $1,726 on monthly expenses (excluding rent/mortgage payments).