Of those who received a bonus, they spent just 1.7% higher on their homes in December than in a typical month.
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Just over half of Standard Bank’s salary earning customers received a bonus or 13th cheque payout in December last year.
Shené Mothilal, the solution owner of digital money manager at Standard Bank explained that when focusing on December 2024 for salary-earning customers who have a salary increase greater than 25% of their typical salary, the data suggests that 48% of South Africans do not receive a bonus or 13th cheque payout.
"That is 52% who do receive some increased income,” Mothilal said.
Meanwhile, of those who received a bonus, they spent just 1.7% higher on their homes in December than in a typical month.
Standard Bank said when considering the spending pattern only for those who receive a December bonus or a 13th cheque payout compared to their typical spending using their current data, they saw a higher proportion of spend towards clothing (2.9%) in December than a typical month.
This was followed by groceries (2.5%), home (1.7%) and entertainment (1.2%), with savings only increasing by around 0.04%.
Mothilal said this is a different picture when comparing the spending patterns to March bonus recipients who prioritise their increased earnings on loans, education and transport as well as holiday and travel.
Standard Bank added that when looking at March 2024 for customers who have a salary increase greater than 25% of their typical salary, the data revealed that 62% of South Africans did not receive a March bonus payout.
Meanwhile, Tanya Tosen, a tax and remuneration specialist at Tax Consulting SA, warned that if failure to adjust personal income tax brackets for inflation in the 2025/26 tax year is not addressed, the affordability challenges of salary-earners will likely worsen.
She warned that potential homeowners may struggle to meet deposit requirements or qualify for loans, leading to decreased demand in the housing market.
“Existing homeowners, especially those with variable-interest rate bonds, could find it harder to keep up with bond payments, increasing the risk of foreclosures. Over time, reduced demand could lead to stagnation or even a decline in property values, affecting investment confidence in the real estate sector,” Tosen said.
She added that a prolonged slowdown in property transactions could also impact related industries such as construction, real estate services and banking.
“Without intervention, the broader economy could experience slower growth, reduced consumer spending and potential instability in the housing sector, making it crucial for policymakers to address the issue before it significantly affects economic activity.”
To mitigate the impact, Tax Consulting SA said several reforms could be considered, including adjusting tax brackets annually to reflect inflation. She believes that this would prevent a bracket creep, ensuring individuals are not pushed into higher tax brackets unfairly.
The Sandton-based tax consultancy said tax relief measures like temporary tax rebates or targeted deductions for first time homeowners, as is seen in some other countries, could alleviate some of the financial pressure.
It added that a carefully considered reduction in the repo rate could provide relief to those with existing bonds and other debts, increasing disposable income.
“Lowering borrowing costs would make it easier for new buyers to afford home loans and reduce financial strain on existing homeowners. However, this would require balancing inflationary pressures and economic growth considerations.”
Tosen said implementing these reforms would require legislative amendments, fiscal adjustments and coordination between tax authorities, banks and financial institutions.
“Policymakers would need to weigh the revenue impact on government finances against the long-term benefits of maintaining a stable property market and supporting homeownership while ensuring inflation remains under control.”
The firm said that the failure to adjust personal income tax brackets for inflation in the 2025/26 tax year will reduce the disposable income of both middle and high earners. For middle-income earners, it said it could mean tighter budgets, making it harder to afford bond payments or to qualify for home loans due to higher debt-to-income ratios. It added that some may delay purchasing homes or downsize their housing expectations.
On the other end, it said high-income earners may find themselves paying significantly more in taxes, reducing their ability to invest in higher-end properties or second homes, which could slow down activity in the luxury housing market. By extension, Tosen said that the property sector may experience reduced demand, potential stagnation in property price growth and slower overall market activity.
Independent Media Property
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