From 1 March 2025, South Africa will introduce a new National Minimum Wage (NMW), which all employers must adhere to in order to remain compliant with labour laws. The minimum wage will increase to R28.79 per hour, reflecting a 4.39% increase from the 2024 rate of R27.58 per hour. Employers who fail to comply with this legal requirement could face severe consequences, including fines and legal action.
Key Changes in the 2025 Minimum Wage
- The general National Minimum Wage (NMW) will rise to R28.79 per hour.
- This increase applies to all sectors, including domestic workers and farmworkers.
- Workers employed in Expanded Public Works Programs will have a lower threshold but will also see an increase.
HR and payroll teams must ensure that all employees earn at least the new minimum wage. Companies that fail to adjust salaries accordingly may face penalties and non-compliance issues from the Department of Employment and Labour.
For businesses employing minimum wage workers, this adjustment means increased payroll expenses. Employers need to budget for the wage hike to avoid financial strain.
With higher wages, deductions such as UIF (Unemployment Insurance Fund), PAYE (Pay As You Earn tax), and pension contributions will also be affected. Payroll systems must be updated to ensure accurate calculations and deductions.
Some businesses may respond to wage increases by improving efficiency, adjusting work hours, or investing in technology to balance rising labour costs. HR teams should develop strategies to maintain productivity while ensuring fair employee compensation.
Conclusion
The increase in National Minimum Wage from 1 March 2025 is a critical change that affects businesses across all sectors. Employers must take proactive steps to ensure compliance, manage payroll effectively, and prepare for the financial impact. By staying informed and adjusting payroll structures accordingly, businesses can navigate this transition smoothly while maintaining a fair and legally compliant work environment.
