The country’s Minister of Employment and Labour Nomakhosazana Meth described the rise as a “step towards improving the livelihoods of workers across all sectors, including vulnerable farm and domestic workers.”
The increment is based on the November annual consumer inflation rate of 3.5%, plus 1.5 percentage points, following the recommendation of the National Minimum Wage Commission.
Workers in expanded public works programmes will see their pay rise by 9.6%, from R15.16 ($0.95) to R16.62 ($1.04) per hour.
Unemployment and Economic Struggles Persist
The minimum wage, first introduced in 2019 at R20 ($1.39) per hour, was implemented to reduce pay disparities in South Africa.
The upcoming increase of R1.44 ($0.09) per hour is intended to improve livelihoods and slightly outpace inflation, with adjustments guided by the National Minimum Wage Commission.
However, unemployment remains high, with 32% of the workforce without jobs, and the rate rises to 42% when discouraged job seekers are included.
Workers who spend most of their income on essentials such as food and electricity are likely to see only modest relief from the increase.
Economic Context: Tariffs, Power Cuts, and Slow Growth
South Africa, Africa’s largest economy, continues to face significant economic challenges.
According to an OECD economic survey, the country’s real GDP growth averaged about 0.7% per year over the past decade, falling below population growth and reflecting generally sluggish performance.
The nation is also contending with rising electricity tariffs, frequent power outages, and persistent inflation.
Recent data shows that consumer prices rose 3.6% in December 2025, highlighting inflation as a continuing concern, particularly for households that spend a significant share of their income on essentials such as food and utilities.
These pressures, combined with high unemployment and slow wage growth, continue to constrain improvements in living standards for many South Africans.
Parliamentary Coordinator Matthew Parks of the Congress of South African Trade Unions, the nation’s largest labour federation, said the wage increase “will inject badly needed stimulus into the economy, spurring growth, sustaining and creating jobs.”
Legal Protections and Exemptions
Companies are required to pay the national minimum wage; however, exemptions can be requested under specific conditions.
In addition, allowances such as transport, food, or accommodation are not included in the calculation of the minimum wage.
Minister Nomakhosazana Meth highlighted that the NMW serves as the legal floor for employee remuneration, stressing that “no employee shall be paid below the NMW, and it cannot be varied by contract or collective agreement.”
A Modest Relief Amid Structural Challenges
Amid ongoing economic challenges in South Africa, including high unemployment, rising tariffs, and electricity shortages, the wage increase provides some relief for workers.
At the same time, it highlights the structural issues that continue to constrain broader improvements in living standards.
