Increase in the national minimum wage from 1 March 2025
On 4 February 2025, the Minister of the Department of Employment and Labour, Ms. Nomakhosazana Meth, announced an increase to the national minimum wage (NMW) of 4.4%. This increase took effect as of the 1st of March 2025, which means that employers must now pay employees at least R28.79 per normal hour of work. Until 28 February 2025 the NMW was R27.58. The National Minimum Wage determination includes vulnerable sectors such as farm workers and domestic workers, whom since 2022, were aligned with the NMW rates. National Minimum Wage Gazette No 52053.
The National Minimum Wage is the minimum amount of pay that an employer is legally required to remunerate employees for work done. No employee should be paid below the National Minimum Wage.
There is an exception to the application of the NMW for individuals who are hired workers employed on expanded public works programme. These individuals are entitled to a minimum wage increase of R15.83 from R15.16 per hour.
- Prescribed rate per kilometre for travel has decreased from 1 March 2025
Until 28 February 2025 the prescribed tax-free rate per kilometre was R4.84. From 1 March 2025 the Minister of Finance decreased the prescribed rate to R4.76. Employers are advised to adhere to the prescribed rate to avoid requesting employees to complete a logbook and to be taxed on a different IRP5 code.
- Increase in Basic Conditions of Employment Act earnings threshold for 2025
As from the 1st of April 2025, the earnings threshold will be increased from R254 371.67 (R21 197.63 per month) to R261 748.45 (R21 812.37 per month). BCEA Earnings Threshold Gazette No 52232.
“Earnings” means gross pay before deductions, such as income tax, pension, medical insurance, and similar payments, but excludes similar payments (contributions) made by the employer in respect of the employee.
Section 6 of the Basic Conditions of Employment Act makes provision for the Minister of Employment and Labour to determine an earnings threshold. The effect of such a threshold is that it excludes employees earning above the determined amount from the protection offered to employees under certain sections of chapter 2 of the Act. Chapter 2 of the BCEA primarily deals with the regulation of working time of employees:
- Ordinary hours of work
- Overtime
- Compressed working week
- Averaging of hours of work
- Determination of hours of work by Minister
- Meal intervals
- Daily and weekly rest period
- Pay for work on Sundays
- Night work -17(2) that deals with transport and night shift allowances
- Public holidays – 18(3) that deals with payment for work on a public holiday that falls on a day on which the employee would ordinarily not have worked.
Additionally, as per sections 198, 198A to 198D of the Labour Relations Act, employees earning below the earnings threshold are considered to be vulnerable and are entitled to additional protection pertaining to non-standard employment arrangements such as fixed term contracts, labour broker and part-time employees.
If you have any enquiries regarding the content of this article, please contact Anél Crous at anelv@fhbc.co.za or Leané de Beer at leane@fhbc.co.za