Median Monthly Earnings by Status in Employment, 2017 & 2022.
STATS SA has released a report on monthly earnings which makes for interesting reading. Below is a summary of the highlights.
In 2017, there were approximately 16,1 million employed persons for pay or profit. The number declined by 642 000 in 2022 to 15,4 million, with 13,0 million being employees (or 84,0%), while 1,6 million (or 10,5%) were own-account workers and 846 thousand (or 5,5%) were employers. The median monthly earnings were highest among employers at R10 000, followed by employees with their median at R5 417, and the lowest median monthly earnings were observed among the own- account workers at R3 500 in 2022.
Between 2017 and 2022, the total median monthly earnings increased by R800 from R4 400 to R5 200. Over the same period, the largest increase in the median monthly earnings was observed among employees (R917), followed by own-account workers (R900). It remained unchanged among employers at R10 000. The median monthly earnings for employers was higher across all years compared to that of employees and own-account workers.
The distributions of employers’ and own-account workers’; are significantly different from employees. Moreover, the distribution of employers and own-account workers also differs substantially from each other. Since these relationships vary depending on an individual’s status in employment, an analysis that considers all employed would consequently produce less meaningful data regarding the relationship between socio-demographic variables and earnings. The number of people employed in the informal sector in South Africa reached a peak point at over 7.8 million in 2023. This has been part of a general increasing trend.
South Africa Introduces Two-Pot Retirement System to Enhance Flexibility & Financial Security.
In a bid to improve retirement outcomes and provide financial relief to individuals in times of distress, South Africa is set to implement a new retirement system known as the “Two-Pot” system. This reform, which will come into effect on 1 September 2024, allows retirement fund members to make partial withdrawals from their retirement funds before retirement while preserving a portion that can only be accessed at retirement.
Under the Two-Pot system, retirement contributions will be split into a “savings component” and a “retirement component”. One-third of the total contributions will go into the savings component, while two-thirds will be allocated to the retirement component. This division aims to strike a balance between long-term retirement savings and providing flexibility to members facing financial difficulties.
The savings component will be accessible at any time, with a minimum withdrawal amount of R2,000. However, members are advised to use this component sparingly and only when there is a dire need. Withdrawals from the savings component will be taxed at the individual’s marginal tax rate, but there is no maximum withdrawal limit.
On the other hand, the retirement component cannot be accessed until retirement, ensuring that a portion of the savings is preserved for the future. This component will be protected and will continue to grow through investment growth credited to the account.
To kickstart the Two-Pot system, a seeding capital known as the “seed capital” will be allocated to the savings component. From the value of the fund on 31st August 2024, 10% or R30,000, whichever is lower, will be transferred as seeding capital. This one-time transfer aims to provide an initial boost to the savings component and will not be repeated in subsequent years.
It is important to note that the Two-Pot system applies to all retirement funds, including both private sector and public sector funds, except for certain exceptions such as old generation retirement annuity policies and funds with no active participating members. Additionally, pensioners and members of provident funds who were 55 years and older on 1 March 2021 and have not opted to be part of the Two-Pot system will be excluded.
In light of these changes, individuals are encouraged to carefully consider their options and seek advice from accredited financial advisors. It is crucial to identify long-term savings goals and plan for the future, while also being mindful of unforeseen events that may require adjustments to the plan. For provident fund members over the age of 55 on 1 March 2021, the option to structure contributions according to the Two-Pot design is available.
We will keep you posted on developments in this regard.
Key Steps to Business Success in South Africa.
- Understand the Market: Before starting a business, it’s crucial to understand the South African market. This includes studying the demographics, consumer behaviour, and market trends. Use reliable sources to gather data and consider hiring a local market research firm for in-depth analysis.
- Create a Solid Business Plan: A well-structured business plan is a roadmap to success. It should outline your business goals, target market, marketing strategy, financial projections, and operational structure. Regularly review and update your business plan as your business grows and market conditions change.
- Comply with Legal Requirements: South Africa has specific legal requirements for starting a business. These include registering your business with the Companies and Intellectual Property Commission (CIPC), obtaining necessary licenses and permits, and complying with tax regulations. Consult with a legal expert to ensure you meet all legal obligations.
- Build a Strong Team: Your team is the backbone of your business. Hire individuals who share your vision and possess the skills your business needs. Invest in their training and development to foster a productive and positive work environment.
- Offer Quality Products or Services: South African consumers value quality. Whether you’re offering a product or a service, ensure it meets high standards. Regularly seek feedback from customers and make necessary improvements.
- Implement Effective Marketing Strategies: Effective marketing can help your business reach its target audience and boost sales. Consider various marketing channels, such as social media, print advertising, and events. Tailor your marketing messages to resonate with your target audience.
- Provide Excellent Customer Service: Excellent customer service can set your business apart from competitors. Train your staff to handle customer inquiries professionally and efficiently. Remember, a satisfied customer is likely to be a repeat customer and may refer others to your business.
- Adapt and Innovate: The business landscape is constantly changing. Stay updated with industry trends and be ready to adapt your business model as needed. Embrace innovation to stay competitive and meet changing customer needs.
Remember, success doesn’t happen overnight. It requires planning, hard work, and persistence. But with the right approach, you can build a successful business in South Africa.
Should require any assistance in this regard please do not hesitate to contact us for advice in this regard.
How to Use AI in Formulating a Business Strategy.
Before integrating AI, it’s crucial to understand its capabilities. AI can process large amounts of data, identify patterns, automate tasks, and provide predictive analytics. Understanding these capabilities can help you identify how AI can benefit your business. Identify areas in your business that can benefit from AI. This could be customer service, sales forecasting, inventory management, or data analysis. The goal is to find tasks that are time-consuming or require large amounts of data processing.
There are various AI tools available, each designed for specific tasks. For instance, chatbots can enhance customer service, while machine learning algorithms can help with sales forecasting. Choose the tools that align with your business needs.
AI relies heavily on data. Therefore, proper data management is crucial. Ensure you have strategies in place for data collection, storage, and analysis. Also, consider data privacy regulations when handling customer data.
Implement AI incrementally rather than all at once. Start with one area of your business, measure the results, and make necessary adjustments before moving on to the next area. AI requires specific skills – You might need to hire new talent or train your existing staff. Areas like data science, machine learning, and AI programming are particularly important. Once AI is implemented, continuously monitor its performance and make necessary adjustments. AI is a rapidly evolving field, and staying updated with the latest developments can help you maintain a competitive edge.
In conclusion, AI offers numerous benefits, but it requires careful planning and implementation. With the right approach, AI can significantly enhance your business strategy and contribute to your business’s success.
Sincerely,
