South Africa implemented a new National Minimum Wage. Learn what the minimum wage is in the country!

Establishing a fair and equitable salary is crucial to ensuring the well-being of workers across various sectors. In South Africa, the minimum wage has been through changes and that’s what we are going to address here.

So, let’s talk about South Africa’s minimum wage and its recent changes, and what it can afford. Also, if you want to check out more financial tips on our website, you can click on this link!

What Is A Minimum Wage?

It refers to the lowest legal hourly or salaried wage that employers are obligated to pay their workers. It acts as a safety net, ensuring that workers receive a base level of compensation for their labor. Minimum wages tend to be set by governments and can vary depending on the country, region, and even industry.

What Is the Minimum Wage in South Africa?

As of March 1, 2024, South Africa implemented a new National Minimum Wage (NMW). Employment and Labour Minister T.W Nxesi announced the raise from R25,42 to R27,58 for each ordinary hour worked, including for farm workers and domestic workers. This announcement marked an 8.5% increase in it, surpassing the inflation expectation of 5.9%, but still not managing to outpace the 11% average increase in food prices.

When calculated at 8 hours per day, the monthly wage for domestic workers (160 hours a month) should increase from around R4,100 to over R4,400 – an increase of R300.

However, the workers employed on an expanded public works programme are entitled to a minimum wage of R15,16 per hour, increasead from pervious R13,97.

What Can the Minimum Wage Afford?

While it provides a baseline income, a critical question is: what standard of living can it realistically afford? A living wage should be enough to cover not just basic necessities but also a buffer for unexpected expenses and participation in society. Using the 2024 minimum wage, let’s take a look at the usual expenses to understand its limitations:

• Rent: finding affordable housing can be a challenge in South Africa, particularly in urban areas. While rental prices vary considerably, a basic room in a shared living situation can easily cost R1,500 or more per month, leaving a significant portion of the income spoken for;
• Food: a low-income household spends a substantial portion of its income on food. While it’s possible to find budget-friendly options, affording a healthy and balanced diet on the minimum wage can be difficult;
• Transportation: public transport costs can add up quickly, especially for those living far from their workplaces. Depending on the distance and mode of transportation, commuting expenses can easily reach R500 or more per month. And for people who own a car, gas prices aren’t cheap either;
• Utilities: basic utilities like electricity and water are essential. The cost can vary depending on location and consumption, but budgeting around R500 per month for utilities is a reasonable estimate.

Beyond these basic necessities, there are other things that need to be taken into account:

• Debt: many South Africans struggle with debt, and even a small monthly loan repayment can significantly impact their disposable income;
• Healthcare: public healthcare is available in South Africa, but it can be a struggle. Private healthcare can be expensive, and even basic medication costs can strain a budget;
• Education: while primary education is free, additional schooling or higher education can end up being out of reach for many minimum wage earners.