The average salary in South Africa is 31,100 ZAR (South African Rand) per month. This amounts to USD 1,599 as per the latest exchange rates in May 2023.
South Africa has significantly lower average salaries than the United States or the United Kingdom, making it an attractive outsourcing destination.
In this article, we’ll share key stats on the average salary in South Africa, along with the top three reasons to outsource to South Africa.
Table of Contents
Let’s dive in.
What is the average salary in South Africa?
According to Salary Explorer, a South African employee earns an average monthly salary of 31,100 ZAR or 374,000 ZAR per year. As per the exchange rates in May 2023, this equates to an average income of USD 19,233/year.
The average monthly salary includes housing, transport, and other cost benefits.
The national average salary of South Africa depends on several factors like education level, job type, job title, work experience, and the sector (public or private sectors.)
For instance, public-sector employees in South Africa earn 7% more average total compensation than their private-sector counterparts across all industries.
However, South Africa’s average annual salary can fluctuate due to:
- The government’s wage policies.
- Trade unions’ average wage bargaining power.
- Cost of living.
- The demand/supply of specific skills.
- Job location.
This is why it’s a good idea to look at average salary data from different perspectives. It’ll help you determine how much you should ideally be paying your South African employees.
So let’s look at the various aspects of the average salary in South Africa.
1. Median salary
The median salary in South Africa is 27,100 ZAR per month (USD 1,394). This is equivalent to a median annual salary of 325,000 ZAR (USD 16,714.)
What does that mean?
It means that 50% of the South African population earns less than 27,100 ZAR while the other half earns more than 27,100 ZAR.
Generally, the country’s economic development is directly proportional to the number of people earning more than the median salary.
2. Maximum and minimum salary range
The national average monthly salary in South Africa ranges from a minimum wage of 7,880 ZAR per month (USD 405) to a maximum average salary of 139,000 ZAR per month (USD 7,148.)
However, the actual maximum salary can be higher based on an employee’s experience, educational qualification, etc.
3. Average annual salary increase
Employees in South Africa are most likely to get a salary increment of approximately 8% every 18 months.
Although the term ‘annual salary increase’ implies a salary increment every 12 months, it isn’t always the case. The frequency of gross salary increments can vary from company to company and will be mentioned in the job description.
A. Annual increment rate by industry
Here are the annual salary growth rates across different industries:
|Industry||Annual Increment (National Average)|
B. Average salary increase rate by experience
The annual salary of a South African employee increases with experience.
Here’s the average yearly increase in salaries based on experience level:
|Experience Level||Annual Increment (National Average)|
|Junior Level||3% – 5%|
|Mid-Career||6% – 9%|
|Senior Level||10% – 15%|
|Top Management||15% – 20%|
Note: The salary estimates provided here are averages of numbers and should only be taken as general guidelines. Gross salary and increment will vary from person to person and depend on the factors mentioned earlier.
4. Minimum wage
Initially, there was no national minimum wage in South Africa.
Trade unions in the domestic worker, farming, hospitality category set minimum wages through collective agreements to address massive wage inequality in the labor market.
As of March 2023, the minimum hourly wage that employers should pay a worker was set at 25.42 ZAR/hour (USD 1.31/hour).
Salary comparison by experience, education, and city
The average salary of employees in South Africa can vary greatly depending on job type, education, experience, etc.
Here’s the breakdown of the salary comparison based on three crucial factors.
Like most countries, the more years of experience an employee has, the higher the compensation in South Africa.
Here’s the salary increase comparison (over base salary) broken down by experience level:
|Years of Experience||Salary Increase %|
|< 2 Years||Base Salary (starting salary)|
|2 to 5||+32%|
|5 to 10||+36%|
|10 to 15||+21%|
|15 to 20||+14%|
A professional with a Doctorate degree (Ph.D. holders) will earn more than an employee with a Master’s degree. Likewise, a Bachelor’s degree holder will make more than someone who has just passed high school.
Moreover, the salary change based on education level varies from one location to another.
For example, a Senior Software Engineer earns 63,159 ZAR per month (USD 3,248) working in Johannesburg. On the other hand, the software engineer salary in Cape Town is 70,000 ZAR (USD 3,600) for the same job title and education level.
However, the salary survey data listed here is the combined average of multiple jobs.
Here’re the other significant salary stats (shared by anonymous employees in third-party surveys):
- Employees with a Bachelor’s degree make 24% more than diploma holders.
- Master’s degree holders earn a higher salary (29% more) than those with a Bachelor’s degree.
- On the other hand, an employee with a Doctorate degree will make the highest salary (23% more than Master’s Degree holders) for doing the same job.
As per the latest salary survey data, the city of Bloemfontein offers the highest average salary of around 363,000 ZAR per year (USD 18,668), followed by Cape Town and Durban.
Here’re the annual salaries estimates of the top paying South African cities:
|City||Average Salary (annual)|
|Cape Town||435,000 ZAR|
|Port Elizabeth||377,000 ZAR|
According to the latest labor statistics, the average taxable income in South Africa is still significantly lower than in the United States. This makes it a highly cost-effective outsourcing location.
Let’s explore the top industries to outsource to this country.
Top 3 industries to outsource to South Africa
Here’s a brief overview of the top industries outsourced to South Africa.
1. Customer support
South Africa has a multilingual population who can speak French, Portuguese, and Dutch speakers along with Zulu, Xhosa, etc.(official languages). This makes it easy for companies with multilingual clients to outsource their customer service needs to this country.
Moreover, the overlapping time zones are also ideal for European and US companies for offering 24/7 customer service.
According to a 2022 salary survey, a customer service employee in South Africa typically earns a remuneration of 21,300 ZAR per month (USD 1,095).
2. Information technology
South Africa holds tremendous potential in IT-enabled services like support and development. The availability of high-end infrastructure and skillsets are this country’s core strengths.
A person working in the Information Technology sector in South Africa typically earns a national average salary of around 31,300 ZAR per month (USD 1,610.)
According to the 2017-2018 Global Finance & Accounting Outsourcing (FAO) Market Intelligence Survey, South Africa held the 8th rank in the top global offshore locations for finance and accounting.
South African companies can offer complete accounting services, including income declaration, taxation, and financial advisory.
As per the 2022 salary survey by Salary Explorer, the remuneration of a person working in accounting and finance in South Africa is around 32,100 ZAR per month (USD 1,651.)
If you are familiar with outsourcing, you might already know that outsourcing can ease your workload, so you focus more on business development. But, you’ll have to choose an outsourcing destination that suits your needs.
So let’s explore the top three reasons making South Africa such a promising outsourcing destination.
3 key reasons to outsource to South Africa
Here are the three primary advantages of outsourcing to South Africa.
1. Government support
The Department of Trade, Industry, and Competition under the South African government offers several incentives to companies through its Global Business Services Incentive program.
The country has also made proactive changes to its economic policies to counter a high unemployment rate and make BPO services more attractive for international buyers.
Moreover, favorable exchange rates help lower operational costs. As a result, the country has attracted major global brands like Accenture, IBM, and Amazon.
2. Advanced infrastructure
South Africa’s world-class infrastructure makes it a tough competitor for top outsourcing nations like India or China.
Its extensive domestic transportation network and adoption of cutting-edge technology in information and communication have ranked this country higher on the Ease-of-Doing-Business index.
Moreover, the SEACOM telecommunication network (broadband submarine cable system) in South Africa has allowed global connectivity. The country also continues to improve its broadband networks by partnering with major tech companies like Google and Sony Ericsson.
3. Access to highly skilled and educated workforce
Most call centers and other outsourced industries have a steady stream of university graduates applying for entry-level jobs. This is also partially due to the high unemployment rate of the country.
However, companies can also hire highly experienced and skilled employees for crucial business-related industries.
Some of the most popular jobs in South Africa are in information technology, finance and accounting, and legal services. In fact, software engineers can bag the highest-paying job in South Africa.
And while South Africans speak English as their first language, many people are also proficient in French and Portuguese. This allows South African call centers to offer multilingual services to European businesses.
The lower average salary in South Africa as compared to other developed economies like the United States makes it a hotspot for fulfilling your outsourcing needs.
Moreover, the government support, top-notch infrastructure, and availability of a massive talent pool make it a great outsourcing environment.
If you plan to outsource your operations to South Africa, use this average salary guide for a quick salary search and make the right call for your business.