Two sectors that are leading South Africa in salary increases

The financial services industry and the public sector have emerged as the country’s leading sources of salary growth.

This is according to the 2026 Medium-Term Budget Policy Statement (MTBPS), which states that wage growth in both sectors helped to boost personal income tax collections despite a subdued employment environment.

The National Treasury said growth in personal income tax revenue was driven largely by salary increases in the finance and public sectors, even as overall employment levels softened.

This comes at a time when several other sectors continue to face economic pressure and inflation is growing faster than salary increases.

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For financial services firms, the finding highlights the sector’s continued ability to reward skilled professionals amid ongoing demand for expertise in banking, insurance, asset management, fintech and advisory services. While the MTBPS does not quantify the size of salary increases in finance, it specifically identifies the sector as a key contributor to stronger personal income tax receipts.

Finance sector stands out

The finance industry’s prominence in the MTBPS suggests that employers have continued to offer meaningful wage increases despite a challenging domestic economy. Stronger remuneration in financial services has become increasingly important to retaining talent as firms compete for specialists in technology, risk management, compliance and investment management.

The sector’s wage growth contrasts with a number of traditional industries where the MTBPS found no evidence of broad-based salary gains. Manufacturing, construction, electricity, mining and agriculture were not identified as sectors experiencing similarly meaningful wage increases, reflecting the uneven nature of South Africa’s economic recovery.

Public sector wage bill expands

The MTBPS also points to sustained remuneration growth across the public service. The government’s wage bill is projected to increase from R716.6 billion in 2025/2026 to R850.4 billion by 2029/2030, with average wage growth expected to exceed inflation over the medium term.

The increase reflects recent wage agreements, annual adjustments and efforts to attract and retain skilled workers in critical public services. National Treasury projections indicate that the public sector will remain one of the largest drivers of wage growth in the economy.

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Among government functions, education and healthcare account for the largest increases in compensation spending.

The education wage bill is projected to rise from R278.1 billion in 2026/2027 to R306.7 billion in 2029/2030, while health-sector compensation is expected to grow from R187.1 billion to R210.7 billion over the same period.

Education and health dominate growth

Other public services, including policing, correctional services, defence and social development, are also expected to record rising compensation allocations over the medium-term expenditure framework.

The figures indicate that public-sector workers are likely to experience real wage growth, with salary increases projected to outpace inflation. This comes as the government balances pressure to contain spending while maintaining essential public services.

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