The average South African in formal employment took home R17 144 in July 2025, according to the BankservAfrica Take-home Pay Index, which tracks roughly 3,8 million salaried workers every month. That is 6,9 per cent more in rand than the same average earner took home in February 2025.
The Pietermaritzburg Economic Justice and Dignity Group (PMBEJD) prices a forty-four-item household food basket every month. The most recent print is R5 452,09, up 31,8 per cent in five years. The NERSA tariff determination has added another 8,76 per cent to every kilowatt-hour from 1 April 2026.
The pay slip is up. The basket is up more. Here is the arithmetic.
The standstill number, in one line
The average BankservAfrica earner needs roughly a 5 to 6 per cent annual nominal raise just to stand still on food, electricity, and petrol combined. Anything below that is a real pay cut, even when the payslip says “increase”.
That is the standstill figure. It is also why the IOL July 2025 take-home report flagged a 1,1 per cent decline in nominal pay from June to July as a meaningfully bigger story than the headline suggests: the gap was nominal, but the real-terms loss compounded with food and electricity moving the other way.
The R12 000 earner: where the basket eats most
A household with one earner taking home R12 000 a month is spending roughly 45 per cent of that, or R5 400, on food. The PMBEJD basket is the floor, not the ceiling, of what gets bought, and most households at this income tier sit very close to it.
A 6 per cent annual raise at this income is R720 a month extra. The 8,76 per cent NERSA hike on a R900 monthly electricity bill is R79 a month extra. A 31,8 per cent five-year food basket move, even amortised across the same five-year run of pay rises, is R1 315 a month higher than five years ago, against pay rises that average roughly 5,5 per cent a year in the same window.
The standstill at this tier requires a raise above 6 per cent every year. Most do not get one.
The R17 144 earner: the index average
The average BankservAfrica earner spends roughly 30 per cent of take-home pay on food, 8 per cent on electricity and water combined, and another 12 to 15 per cent on transport (petrol or taxi fares). That is R8 600 to R9 400 a month on the three categories that have moved hardest.
A 6 per cent raise on R17 144 is R1 029 a month. The combined annual move on the same household’s food, electricity and petrol comfortably absorbs all of it. The savings rate at this tier, on average, did not move in 2025. The BusinessTech 2025 salary read called it “a good salary year” in nominal terms. In real terms it was a stand-still year, which is the better outcome than the four years that came before it.
The R45 000 earner: where the squeeze becomes a savings problem
A household with one or two earners pulling R45 000 combined take-home a month spends roughly 18 per cent on food, 5 per cent on electricity and water, and 10 per cent on transport. The combined cost-of-living move on those categories in 2025 to 2026 is, in rand, R900 to R1 200 more a month than it was a year ago.
The standstill raise at this tier is mathematically easier. The squeeze shows up somewhere else: medical aid, school fees, and the bond payment. The StatsSA CPI release for March 2026 had headline inflation at 2,7 per cent, but the same release noted education inflation tracking above 6 per cent and medical aid contributions tracking above 7 per cent. A R45 000-a-month household is more exposed to those two categories than to the food basket, and the standstill calculation moves with them.
The discretionary savings line, not the grocery line, is where the pressure compounds at this income tier.
The retiree on a fixed living annuity: the worst version of the picture
A retiree on a fixed-draw living annuity of, for example, R20 000 a month has no equivalent of a 6 per cent raise. The draw is the draw. The food basket, the electricity bill, and the medical aid contribution all move; the income line does not.
A retiree drawing R20 000 a month against a 2024 cost base now needs R21 200 a month to keep the same household running into mid-2026, by the same cost-of-living math used above. The reserve has to come from somewhere: a higher draw rate, a smaller capital base, or a category-by-category trim in the household. Retirees on fixed annuities are the population most exposed to the gap this article is about, and the gap has done its hardest work on them.
Why your annual increase letter does not feel like a raise
The HR letter shows a percentage. The bank app shows a higher rand number. Both are real. The reason the increase does not register as one is that the same month’s grocery receipt, electricity meter and petrol fill-up are running on a different inflation number than the headline CPI.
Headline CPI in March 2026 was 2,7 per cent. The PMBEJD basket was running at 3,6 per cent year-on-year. The NERSA hike was 8,76 per cent. School fees on the NAISA survey moved 5 to 8 per cent. Medical aid contributions moved 7 to 9 per cent. The line items that a household actually pays are weighted differently from the basket that CPI averages across the entire economy. If your household is more weighted toward food, electricity, school fees and medical aid (most South African households are), the CPI in the news is not the CPI in your bank app.
This is a methodology feature, not a measurement error. The headline number is right. So is your bank app. They are measuring two different things.
What this is worth doing about
There is no consumer hack that closes a five-year structural gap between wages and the basket. There are, however, three things any household can do this month:
- Calculate your standstill rate. Add your monthly food, electricity, transport, school fees and medical aid. Multiply by the weighted move on those categories in the last twelve months (a fair starting estimate is 6,5 per cent). That rand number is the raise you need just to hold ground. Anything above is real progress.
- Audit the categories that moved hardest, not the ones you spend most on. A 31,8 per cent move on food beats a 4 per cent move on insurance, even if you spend more on the latter. Substitution savings are largest in the categories with the biggest year-on-year moves.
- Move at least one category to a fixed contract. Internet, insurance, gym memberships, and most subscription services are negotiable annually. A single fixed-price renegotiation locks one budget line for twelve months and converts a moving target into a stable one.
The raise letter is not lying. The basket is not lying. The gap between them is the work.