National Minimum Wage Increase

Our blog post today covers the recently Gazetted national minimum wage increases, due to come into force on 1 March 2021. The changes bring an increase in the minimum wage for both the sector-specific wages and the national minimum wage.

The minimum wages from 1 March will be as follows:

National Minimum WageR21.69
Farm Workers Minimum WageR21.69
Domestic Workers Minimum WageR19.09
Public Works Program Minimum WageR11.93

Please note also that the minimum wage for Learners has been increased by 4.5% across all NQF levels.

The minimum wages for farm and domestic workers have significantly increased in comparison to last year (see 2020’s blog post), reflecting the Government’s aim to equalise all minimum wages over time.

Should any of your employees be on or near the current minimum wage, you should increase their hourly rate to at least meet the above amounts from next month. This is particularly important if you are benefiting from ETI for those employees, as this is a requirement to qualify for the incentive and the penalties for breaching the rules are severe.

As you know, we like to make your payroll a breeze. If you want to quickly check all your employees’ wages in one go, simply navigate to:

  • Employees > Bulk Actions > Regular Inputs (under Payroll Inputs)
  • From the dropdown boxes, select “Basic Salary” and either “Hourly Paid” or “Salaried”
  • Your employees and their hourly rate / salaries will be listed for you to review and amend as you deem necessary.

We hope that this information has proved useful to you. If you have any questions for us, you can contact us at [email protected]

Equally, if you are not yet a client of SimplePay but would like to be, why not check out our website? Or, better yet, try out our service for free with our 30-day trial, get acquainted with our user-friendly service by reading our getting started page, or take our free online course

Keep well and stay safe.

Team SimplePay

National Minimum Wage Increase

The national minimum wage rates, as specified in the National Minimum Wage Act, will increase by 3.8% from R20 per hour to R20,76 for employees. This minimum wage increase will be effective from 1 March 2020.

This means that the hourly rate will need to be changed for employees who are currently earning a wage lower than R20,76 per hour. To review or edit the hourly rate for employees, go to Employees > Bulk Actions > Regular Inputs and select “Basic Salary” and “Hourly Paid” under Filters.

This increase in the hourly rate will also mean an increase in the leave pay for hourly-paid workers as they will be paid extra when paid leave is taken. More information on leave pay can be found on our help site here.

Remember that a change in the ordinary hourly wage will also impact the rate for Sunday pay and public holiday pay. For more information on these, refer to our help page here.

Specific groups of workers will also have an increase in their national minimum wage of 3.8%, as shown below:

  • Farm workers: R18,68 per hour
  • Domestic workers: R15,57 per hour
  • Public works program: R11,42 per hour

Additionally, certain sectors are also covered by the rates contained in the Schedules to this Gazette

Learnership Allowances

The learnership allowances per week for learners specified in Schedule 2 of the National Minimum Wage Act have also increased and come into effect on 1 March 2020. Please refer to page 2 of the Government Gazette linked above for the allowances.

If you have any further queries regarding the impact of this Act on your payroll and on the system, please do not hesitate to contact us.

Team SimplePay

National Minimum Wage Act

In an effort to address wage inequality and stimulate economic growth, president Cyril Ramaphosa signed the national minimum wage bill into law last month.

The National Minimum Wage Act stipulates that the minimum wage is to be administered on an hourly basis and is set at R20 per hour. This minimum wage will be effective from 1 January 2019.

This means that the hourly rate will need to be changed for employees who are currently earning a wage lower than R20 per hour. To review or edit the hourly rate for employees, go to Employees > Bulk Actions > Regular Inputs and select “Basic Salary” and “Hourly Paid” under Filters.

Remember that a change in the ordinary hourly wage will also impact the rate for Sunday pay and public holiday pay. For more information on these, refer to our help page here.

Impact on ETI

The ETI Act states that when there is no “wage regulating measure”, the minimum wage to qualify for ETI is R2 000 per month. SARS has confirmed that the national minimum wage does not count as a wage regulating measure and the R2 000 minimum stands. However, the national minimum wage should ensure that employees will meet this minimum anyway.

Proposals have been made by professional bodies to amend the ETI Act to clarify this and to replace the R2 000 minimum on ETI with a use of the national minimum wage, but this potential change has not yet been approved.

If you have any further queries regarding the impact of this Act on your payroll and on the system, please do not hesitate to contact us.

Team SimplePay