Average salaries in the UK vs South Africa – How much more Brits earn

South Africa is losing a large number of wealthy South Africans, and the United Kingdom is one of the most popular destinations for expats.

Finance Minister Enoch Godongwana said that a trend of ‘mobile higher-income earners’ has been observed since 2018, which he said was costing the country billions in taxes.

Godongwana added that over 32,000 people in South Africa have changed their residence between 2017 and 2021, with over 1,000 earning in excess of R1 million per year.

One of the most popular destinations for South African emigrants is the UK, with thousands moving to the nation each year to work or study.

Considering the popularity of the UK for South African emigrants, BusinessTech decided to compare the average salary across various industries in both countries.

We looked at the most recent data from South Africa’s Quarterly Employment Survey and the UK’s Annual Survey of Hours and Earnings.  It should be noted that sectors may slightly differ across South Africa and the UK.

For instance, the Public Administration sector in the UK was compared to Community, Social and Personal Services sector in South Africa.

However, if there was no clear distinction between countries, such as the UK’s fourth largest sector, Information and Communication, the sector was omitted from the list.

Looking at the data, the average yearly salary in the UK is far higher than it is in South Africa.

Industry UK Annual Earnings (GBP) UK Annual Earnings (ZAR) SA Annual* Earnings Difference
Electricity, gas supply £45 770 R1 114 060  R721 604** R392 456
Financial and Insurance Activities £43 710 R1 063 919 R386 976 R676 943
Mining and quarrying £43 091 R 1 048 852 R384 064 R664 778
Construction £36 259 R 882 177 R 286 808 R595 309
Public administration £35 829 R871 716 R409 704 R462 012
Transport and storage £34 028 R827 898 R382 252 R445 646
Water Supply £34 010 R824 759  R721 604** R103 155
Manufacturing £32 770 R794 688 R312 716 R481 952

*Converted from quarterly to yearly
**Same salary is given in QES data

Not as bad as it seems 

It should be noted that the rand has recently hit an all-time low – well above R24/£. This follows continued load shedding and possible fallout between South Africa and the West regarding allegations that South Africa supplied weapons to Russia.

Moreover, although jobs in the UK offer more income, things cost far more in the UK than in South Africa.

The best way to see this is to use the Big Mac Index, which measures the real value of currencies via two methods – a direct measure of purchasing-power-parity (PPP) and an adjusted index that account for local GDP data.

In January, when the index was published, a Big Mac in South Africa cost R49.90 in South Africa and $5.36 in the US – the implied exchange rate is R9.31. 

However, the difference between this and the exchange rate at the time, R17.21, suggests that the rand is 45.9% undervalued, the 11th most undervalued currency in the index.

The British Pound, however, was far less undervalued. 

In the UK, a Big Mac costs £3.79, with an implied exchange rate of 0.71.

However, the difference between that number and the actual exchange rate, 0.81, hints that the Pound is 12.9% undervalued against the US dollar. 

Put another way – a Big Mac in the UK is 85% more expensive than in South Africa, implying – at least on a rudimentary level – that the rand has far more purchasing power.

Therefore, although jobs in the UK pay more than in South Africa, the cost of living is far cheaper back home.


Read: ‘Surprise’ fuel tax hike could push up flight prices in South Africa

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