Failing South Africa: The 10% TOP EARNERS in SA would only be LOWER MIDDLE CLASS in other nations!


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With the rapidly rising cost of living, it may not be clear how much money South Africans need to survive, both while earning a living and in retirement. The costs can also increase significantly when considering how much it costs to live a more traditional ‘middle-class lifestyle’ in South Africa, says personal finance site

Gareth Price, founder of both Cloudworx and Investmint, and chief financial officer at BackaBuddy, says that people have different ideas about what it means to survive financially.

He noted that, in general, households should prioritise the basics, such as food, rent, transport, electricity, education, burial insurance, debt repayments, basic hygiene and medical products. On average, these costs add up to R7,000-R9,000 per month, he said.

“If you want to move into the middle class, school fees and rent become more expensive, and you may choose to purchase a car rather than relying on public transport. On top of this, you may take out medical aid and perhaps invest in a savings plan. Here, you’re looking at an income of between R35,000 and R45,000 per month,” said Price.

He noted that the vast majority of South Africans earn less than R3,500 a month, with only the top 1% earning around R45,000. To put this into context, a state old-age pension grant offers a maximum of R1,890 per month, or R1,910 if you’re older than 75 years.

According to Statistics South Africa’s employment report for the fourth quarter of 2021, the average worker’s salary in South Africa is R23,982 per month. This amounts to R287,784 annually.

What it takes to be middle-class

Brenthurst Wealth consulting economist Mike Schüssler, who recently passed away, was one of the leading voices around middle-class living in South Africa.

In a research note in April, Schüssler noted that there is no single universal definition for ‘middle class’, with the report instead focusing on the group of people who would, at least, be those who work.

“The percentage of people working in South Africa is one of the lowest in the world. In 2020, less than 36% of the South African population above 15 years of age were working, according to the World Bank. Since 2020 it seems that South Africa has regressed by about 200 basis points to less than 34% if one uses the latest Quarterly Labour Force Survey data,” he said.

“Unemployment in South Africa rose to a record 35.3% in the 4th quarter of 2021. The number of unemployed people increased by 278,000 to 7.9 million. This should be a big worry for not only the Government of South Africa but for each and every citizen. If this trend continues, which seems to be the case – the unrest we have seen in July 2021 will be the tip of the iceberg.”

At present, about two-thirds of the employed in South Africa work in the formal market, which is relatively high for a labour force in the developing universe, Schüssler said.

However, as a result of so few who work, it means that overall, fewer than 25% of adults over the age of 15 actually get a regular paycheck from a formal employer – excluding domestic and farm workers, he said.

In most countries, the person who earns a typical salary would pay personal income tax, but that is not the case in South Africa, Schüssler said. This effectively means that those that pay personal income tax can be considered upper-middle-class, he said.

“However, this does not translate to being rich, as the upper-middle-class is then effectively classified as a working person who earns an annual income upwards of just R87,000. The irony is that many of the top 10% of earners in South Africa would fall into the lower-middle class in many other countries.”


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