Big Change for South Africans Earning Over R21,800: New Earnings Threshold Takes Effect

South Africans earning more than R21,800 per month will face significant changes to their employment protections starting April 1, 2025. The Department of Employment and Labour has adjusted the official earnings threshold to R261,748.45 annually, up from R254,371.67 in 2024. This increase of R7,376.78 (2.9%) means that employees earning above this threshold will lose certain automatic protections under the Basic Conditions of Employment Act (BCEA).

What is the Earnings Threshold?

The earnings threshold determines which employees are entitled to specific protections under the BCEA. Workers earning below the threshold are automatically covered by provisions related to working hours, overtime, and public holiday pay, while those earning above the threshold are not.

For 2025, the threshold is set at R261,748.45 annually, or approximately R21,800 per month. Employees earning above this amount will no longer have statutory rights to certain employment conditions, which must instead be negotiated with their employers.

Key Protections Affected

Employees earning above the threshold will lose automatic protections under the following sections of the BCEA:

• Section 9: Ordinary hours of work
• Section 10: Overtime
• Section 11: Compressed working week
• Section 12: Averaging of hours of work
• Section 14: Meal intervals
• Section 15: Daily and weekly rest periods
• Section 16: Pay for work on Sundays
• Section 17(2): Transport and night shift allowances
• Section 18(3): Payment for work on public holidays

For employees earning above the threshold, these conditions may be negotiated with their employers, potentially resulting in less favorable terms than those guaranteed to lower-earning workers.

Additional Implications

The increase in the earnings threshold also affects other areas of labour law:

• Employees earning above the threshold are not subject to the deeming provisions that apply to labour brokers and fixed-term employment under the Labour Relations Act.
• Under the Employment Equity Act, disputes related to unfair discrimination (except for sexual harassment) must be referred to the Labour Court rather than the Commission for Conciliation, Mediation, and Arbitration (CCMA), unless all parties agree to arbitration.

Impact on Employers

For employers, the higher earnings threshold may result in more employees qualifying for stricter labour protections, such as overtime payments. This could lead to increased financial obligations and the need to carefully review employment contracts and policies.

What Counts as Earnings?

For the purpose of determining whether an employee exceeds the threshold, “earnings” include:

• Regular annual remuneration before deductions for income tax, pension fund contributions, or medical aid.
• Excludes employer contributions to pension funds, medical aids, and similar payments.
• Subsistence and transport allowances, achievement awards, and overtime payments are also excluded.

The adjustment to South Africa’s earnings threshold is a significant change for employees earning more than R21,800 per month. While it provides an opportunity for higher earners to negotiate employment terms, it also removes automatic protections related to working hours, overtime, and public holiday pay.

For employers, the new threshold may require adjustments to payroll and employment policies to ensure compliance with labour laws. As the April 1 implementation date approaches, both employees and employers should familiarize themselves with the changes to avoid potential disputes and financial consequences.

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