The Minister of Employment and Labour has published a new determination increasing the earnings threshold prescribed under the Basic Conditions of Employment Act, 1997 (BCEA).
From 1 May 2026, the earnings threshold will be ZAR 269 600.90 per annum (approximately ZAR 22 466.74 per month).
For purposes of the threshold, ‘earnings’ means an employee’s regular annual remuneration before deductions (such as tax and benefit contributions), but excludes employer benefit contributions, subsistence and transport allowances, achievement awards and overtime payments.
Why the threshold matters
The earnings threshold plays a central role in determining the application of certain statutory protections available to employees under South African employment legislation.
Under the BCEA, employees earning below the earnings threshold benefit from enhanced protections relating to, among other things, working hours and overtime, pay for work on Sundays and public holidays, meal intervals and rest periods, compressed working weeks and the averaging of working hours.
The Labour Relations Act, 1995 affords additional protections to employees earning below the earnings threshold in atypical employment arrangements, including:
- Fixed-term contracts: Where there is no justifiable reason for fixing the term of a contract, such employees may be deemed to be employed indefinitely.
- Labour brokers (temporary employment services): Employees placed by a labour broker to work for a client may be deemed employees of the client if they are not performing a ‘temporary service’ (for example, working for a period exceeding three months or not replacing an employee who is temporarily absent).
Under the Employment Equity Act, 1998, employees earning at or below the earnings threshold may refer unfair discrimination disputes to the Commission for Conciliation, Mediation and Arbitration for arbitration (whereas those earning above the threshold must instead approach the Labour Court for adjudication, unless the claim relates to sexual harassment).
What employers should do
In light of the increase, employers should:
- Review employees’ earnings across their workforce;
- Assess the status of employees engaged on fixed-term contracts; and
- Revisit labour broking arrangements to ensure compliance with the deeming provisions.
Proactive review will help mitigate compliance risks and avoid unintended consequences under the applicable legislation.
