2026 South African Salary Increase Forecast: May Update
In early November 2025, we published our 2026 South African Salary Increase forecast, outlining the methodology used to project future inflation and to determine a real salary increase. At the time, our forecast indicated a 5.00% salary increase for 2026. The full article can be read by clicking here.
We subsequently updated this forecast in January 2026, reflecting evolving economic conditions and lower inflation. We revised the recommended increase to 4.50%, balancing the interests of both employers and employees. The article can be read by clicking here.
As Brian Tracy aptly observed, “In a time of rapid change, standing still is the most dangerous course of action.”
Recent geopolitical developments, including renewed global tensions and rising input costs, have contributed to increased economic volatility. In this environment, it is both prudent and necessary to reassess prior salary increase assumptions to ensure they remain relevant and defensible.
The Governor of the Reserve Bank stated in the May 2026 Monetary Policy Committee minutes that, “In addition, we see renewed pressure on food prices, with the agricultural sector facing higher costs for both diesel and fertiliser. Our forecast now has headline inflation averaging 4.4% this year and 3.7% next year, before returning to the 3% target in 2028”.
This outlook highlights persistent inflationary pressures, particularly in food and energy-related inputs, which continue to influence the broader cost environment.
ur revised internal inflation projections are closely aligned with the MPC’s expectations. The table below summarises historical inflation rates and Axiomatic’s forward-looking forecasts:
Several clients have approached us to request what the revised recommended salary increase for various review periods would be if we were to use the latest inflation forecast. This analysis is tabulated below:
While earlier forecasts suggested more moderate salary increases, updated inflation expectations now justify a slightly higher salary adjustment for the 2026 review cycles.
If you would like further information regarding the article, please get in touch with Brett Hopkins at Brett@axiomatic.co.za or visit the Axiomatic Website to learn more about how we can help your payroll evolve.
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