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New National Minimum Wage March 2023

As of March 2023, South Africa’s national minimum wage is set at R25.42 per hour. This minimum wage applies to all workers in South Africa, except for farm workers, domestic workers and workers who participate in learnerships.

The national minimum wage was introduced in South Africa in 2019 as part of efforts to address income inequality and provide workers with a basic level of income. The minimum wage is adjusted annually by the government’s National Minimum Wage Commission, which considers factors such as inflation, economic growth, and social considerations.

Some industries or sectors may have higher minimum wages or wage agreements negotiated through collective bargaining between unions and employers. These agreements may also consider factors such as the skills and experience required for the job, the cost of living in a particular area, and other relevant factors.

The provisions of the BCEA apply as a set of minimums for terms of employment for employees who do not fall under an Industry Agreement or Sectoral Determination. All the provisions of the BCEA apply to those who earn below the Earnings Threshold per s6(3) of the BCEA as adjusted per Government Gazette Notice. Those who earn above the Threshold [typically senior managerial employees] are still covered for most of the BCEA provisions, except for the following:

– section 9 (hours of work)

– section 10 (overtime)

– section 11 (compressed working week)

– section 12 (averaging of hours)

– section 14 (meal intervals)

– section 15 (daily and weekly rest periods)

– section 16 (pay for work on Sundays)

– section 17 (2) (night work), and – section 18 (3) (public holidays on which the employee would not ordinarily work)

“Earnings” refers to the regular annual remuneration before deductions, i.e., income tax, pension, medical and similar payments and excludes similar payments (contributions) made by the employer in respect of the employee. Should subsistence and transport allowances be received, they and achievement awards and payments for overtime worked, will not be deemed remuneration.

The Earnings Threshold effective 01 March 2022: R224 080.30 p.a. [an effective 5.9% increase on 2021]

The Earnings Threshold effective 01 March 2023: R241 110.59 p.a. [an effective 7.6% increase on 2022]

The Earnings Threshold in terms of BCEA 6(3) was Gazetted on 20 February 2023 and increased to R241 110,59 p.a.

The new National Minimum Wage was Gazetted on 21 February 2023, increased to R25.42 per hour and are effective 01 March 2023.

In recent years, South Africa has experienced slow economic growth and high levels of unemployment, which has affected salary trends. According to a report by Salary Explorer, the average salary in South Africa in 2021 was ZAR 405,000 per year, which was a 3% increase from the previous year.

While the minimum wage is designed to protect low-income workers and promote fair labour practices, some employers may be concerned about the potential impact on their businesses. Higher labour costs can lead to increased operational expenses and reduced profits, which could potentially affect the competitiveness of the business.