What is a good salary? (South Africa)

Ask two different questions about a salary

A good salary can mean fair pay for the work or enough money for the life you need to fund. The first question needs earnings data for comparable jobs. The second needs your take-home pay and a household budget. One national figure cannot answer both.

For the first question, pin down the role, experience, hours and location. For the second, list housing, dependants, debts and savings. Someone who shares a flat may have more room in the budget than a higher earner who supports a family, and that says nothing about which employer pays more fairly.

Read the definition behind an earnings benchmark

A median is the middle value of a group, so half earn more and half earn less. A mean adds up all pay and divides it by the number of people, so a few very high earners pull it up. Check which one a source reports, which year it covers, and whether it counts full-time employees, all workers or another group.

Then compare like with like, meaning gross with gross, annual with annual and similar weekly hours. Find out whether bonuses are included before multiplying a monthly figure by twelve. The example draws a comparison bar only when the benchmark is already annual gross pay; otherwise it shows the benchmark as a reference.

Translate the offer into spendable income

Calculate net pay from the guaranteed annual salary with your own country, year and personal settings. Keep those settings the same across salary levels, so any difference comes from pay alone. The monthly figure is annual net divided by twelve.

Keep non-cash benefits and employer contributions out of the money you can spend. If the model already deducts a cost from salary, such as a health contribution, leave it out of your household budget, and count a paid tax credit only once.

Build a budget that reflects your household

List the housing, utilities, food, transport, health, debt and care costs you actually pay. Add savings and a monthly amount for irregular bills. Take the numbers from bank statements, contracts and quotes; the expenses in the example are illustrative assumptions.

The amount left before rent is not spending money yet. Subtract your real housing cost and anything the sample budget misses. In a shared household, write down who pays what, and compare one person’s salary with that person’s share of the costs.

Compare locations with the same standard of living

A higher salary in another city can come with higher rent or longer commutes. Price a realistic home, travel pattern and budget in each place, with the same savings goal. Keep one-off moving costs apart from monthly costs.

For another country, change the tax model, currency and personal settings as well. The exchange rate alone does not show what the money buys there. Check housing, health cover and contract benefits for your own situation; the calculator does not price them.

Decide what makes an offer sustainable

Test the budget without a discretionary bonus and with one large cost going up. If it only balances when all of the income is spent, one surprise puts it in deficit. How much reserve you need depends on your commitments and how stable the income is.

Add pay data for comparable work, then judge workload, progression and job security on their own terms. An offer can meet your needs without being above average, or be competitive and still not suit your household. Write down which of the two questions your conclusion answers.

Before deciding whether a salary is good

• Match the benchmark by group, year, hours, and gross or net basis.
• Calculate the guaranteed salary with your own country and settings.
• Replace the sample budget with your real housing and household costs.
• Test savings, irregular bills and one plausible drop in income or rise in costs.

Sources and model coverage

What the estimate covers

The calculator estimates employment income using its supported country rules and selected inputs. Benefits, collective agreements and personal circumstances that are not modelled are excluded. Official rules determine your actual liability.

• Resident salary estimate with age rebates, UIF and employer SDL. Assumes an SDL-liable employer. COIDA, disability and out-of-pocket medical relief are excluded.

Official sources

The calculation uses the country model and the stated personal settings. The budget figures are illustrative; official sources explain rules and earnings measures, rather than certify each example.

• www.statssa.gov.za
• South African Revenue Service · Personal income tax
• South African Revenue Service · UIF