Just like any other country around the world, South Africa was badly hit by the effects of COVID-19 and the social distancing lockdown measure. Many people lost their jobs, companies shut down, and employees got salary cuts. However, the situation is looking promising at the moment. 

According to statistics released by BankservAfrica Take-home Pay Index, in October this year, the salaries of employees increased year-on-year by 3%. They said that it is quite easy to actually determine the home pay of South Africans especially because the number of people still employed are fewer than before most of whom received the COVID-19 benefits that were released in September.

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However, it was determined that the actual take-home salary of South Africans in October 2020 was R14,773 at nominal value. Which was a representation of a 5% change for each month from September. Despite that, on an annual level, the salaries paid to South African employers have continued to reduce.

According to the statistics provided, between October last year and this year, there has been a 10.4% decline. And this is more serious than what the information in September indicated. However, July recorded the highest decline at 34%, according to Naidoo. In practice, this greatly contributed to inflation in the country.

The effects of COVID-19

As reported by the BankservAfrica Take-home Pay Index, the employees who received salaries of R30,000 and below were the ones that were most affected during the coronavirus pandemic. They indicated that daily and weekly workers got hit first at the beginning of the coronavirus lockdown, with their salaries significantly dropping. Mike Schüssler said that this is the same thing that happened in countries around the world where lower-income earners were affected the most. 

As compared to the salaries of employees in the month of April, June and July recorded the lowest levels of salary declines. The reason for this was because employment figures delayed economic activities for over a month and employee payments were also very slow. In addition to this, payrolls were already set for just one or two months. Schüssler noted that although April recorded the worst economic figures, July had the worst salary figures, which was just a three month time period. The salaries of South Africans were not the only sector that took a hit as a result of the coronavirus pandemic and the social distancing measures. The financial market and forex trading in South Africa was badly hit as well. When you read this IQ Option SA forex broker review, you will realize that many traders and brokers alike suffered some sort of challenge during this period. However, it also states that those who knew nothing about forex trading developed an interest in forex trading during the COVID-19 period in search of a source of secondary income.

It should be noted that the COVID-19 relief benefits were not included in the calculation, but the BankservAfrica Take-home Pay Index indicated that even jobs in the formal sector were affected negatively during the pandemic. The situation is gradually improving, however, a full recovery will take longer. 

As stated by Schüssler, in October 2020, there was a 0.1% decrease in total salaries in nominal value, although there is an increase in the average take-home salary.

It is also expected that the stimulus payments might assist consumer expenditure. Yet, when these payments and other SASSA payments stop, the real effects of COVID-19 on the South African economy will be exposed through salaries. However, the economy seemed to have calmed down after the turmoil, the actual damage to individual incomes will come up.