Take-home salaries fell by 35 percent in July 2020 compared to 2019
The latest BankservAfrica index reported a "curiously high" number of people not getting a salary.
According to the latest BankservAfrica’s Take-Home Pay and Private Pensions Index, the number of take-home salaries fell by nearly 35 percent in July 2020, compared to the previous year.
The index, which provides information on salary trends, reported a “curiously high” number of individuals not getting a salary or wage throughout the lockdown period in South Africa.
BanservAfrica head of stakeholder engagements Shergen Naidoo says that the challenge for the index is that there is no clear reason given for the fewer payments that are routed through the National Payments System.
In July, the decline in the number of salaries suggested the impact of the Covid-19 lockdown in weakening the economy, and the dire impact this has had on the private sector. However, the latest June and July economic data, including BankservAfrica’s Economic Transaction Index, pointed to an economy in a gradual recovery.
“It is possible that because of UIF TERS, there was about a 480,000 reduction in salary payments via traditional payroll systems, due to payments being made via different means. It seems 2.9 million people were paid, out of a normal 3.3 to 3.6 million normal estimated monthly payments, represented in the BankservAfrica Take-home Pay Index, for July 2020,” says Shergen.