Major Change for Salaries in SA After 5.2% Increase in 2026

• South Africans were projected to receive an average 5.2% salary increase in 2026, supported by stronger economic conditions and lower inflation
• Companies indicated that raises would mostly fall between 4% and 5.9%, while shifting their strategies to focus more on retaining skilled workers
• Reports showed that skills retention became a major factor in salary decisions, with businesses increasingly adopting skills-based pay systems

While the salary bump offered some relief, the real shift in 2026 happened behind the scenes as companies quietly restructured how they reward and retain talent.

South African workers are expected to see an average salary increase of 5.2% in 2026, according to PayInc data. The projection was based on its Net Salary Index, which tracked the net pay of about 2.15 million salary earners nationwide. The forecast came as economic conditions improved, supported by record-high commodity prices, a stronger rand and relatively low inflation. Although the average nominal salary flattened at R21,397 in December 2025, it was still 1.8% higher than the previous year. Businesses were not only planning salary adjustments but also reviewing benefits to attract and retain skilled employees.

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According to Business Tech, PayInc’s Head of Stakeholder Engagements, Shergeran Naidoo, noted that while growth had slowed at the end of 2025, overall earnings remained higher year-on-year. At the same time, a poll conducted by Andrew Levy Employment Publication showed that most companies expected salary increases to remain in line with previous settlements. Around 67% of respondents predicted raises between 4% and 5.9%. However, experts indicated that it may take time for wage expectations to fully align with South Africa’s lower inflation target adopted in 2025.

Skills retention reshaped pay strategies

Beyond salary increases, companies are increasingly focused on retaining scarce skills. The latest Remchannel Quarterly report showed that skills retention accounted for 25.8% of the criteria businesses used when awarding increases. This reflected a shift towards skills-based pay systems rather than blanket adjustments. The South African Reward Association also reported that employers were strengthening total reward packages by combining salary with training, development and engagement initiatives throughout an employee’s career journey.

Retention strategies now include professional development opportunities, flexible work arrangements, wellbeing programmes, leadership development and building inclusive workplace cultures. Organisations were encouraged to tailor these benefits according to their size, structure and workforce needs rather than applying a one-size-fits-all model. Industry reports also highlighted salary ranges across sectors for 2026, with executive managers earning between R83,333 and R125,000, IT managers between R39,981 and R61,097, civil engineers between R50,000 and R65,833, and financial managers between R48,237 and R70,260. Entry-level and support roles reflected lower ranges, showing the continued gap between senior and junior positions in the market.

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3 Other Briefly News stories about salaries

• A content creator who shares real estate and economic information broke down how far a salary went in 1995 compared to today.
• President Cyril Ramaphosa approved a 3.8% salary increase for South Africa's top politicians, triggering netizens on social media.
• A TikTok video revealed how much IT team leaders in South Africa earn after climbing the tech ladder, prompting reactions.

Source: Briefly News