An upward adjustment to the earnings threshold in 2024
March 11, 2024
An upward adjustment to the earnings threshold in 2024March 11, 2024 Employers and employees must take note that the Minister of Employment and Labour has announced an upward adjustment to the earnings threshold in terms of section 6(3) of the Basic Conditions of Employment Act, 75 of 1997 (“BCEA”). The earnings threshold shall increase to R254 371.67 per annum with effect from 1 April 2024. This is an increase of 5,5% from R241 110.59 per annum. ‘Earnings’ means the regular annual remuneration of an employee before deductions in respect of income tax, pension, medical aid, and similar payments made by the employer in respect of the employee. Subsistence and transport allowances received, and payments for overtime worked, among others, are not regarded as remuneration for the purpose of the earnings threshold. The earnings threshold impacts upon the application of various provisions of the BCEA, Labour Relations Act, 66 of 1995 (“LRA”) and the Employment Equity Act, 55 of 1998 (“EEA”). For example:
The increase to the earnings threshold follows the recent increase to the national minimum wages prescribed by the National Minimum Wage Act, 9 of 2018 (“NMWA”) that took effect from 1 March 2024. For information purposes, the national minimum wage has been raised from R25.42 to R27.58 for each ordinary hour worked. The minimum wages for the following categories of employees have also been increased:
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