Annual Adjustment to the National Minimum Wage

The National Minimum Wage Act requires the Minister of Employment and Labour to adjust the National Minimum Wage (NMW) annually with due regard to economic conditions, inflation, the cost of living, wage inequality, employment implications and other socio-economic factors.

For the year beginning 1 March 2026, the Minister has published adjusted NMW rates in the Government Gazette, reflecting the statutory annual review process and concluding consultations with stakeholders.

The New Minimum Wage Rates (Effective 1 March 2026)

With effect from 1 March 2026, the minimum hourly rates that employers in South Africa must pay are as follows:

• Ordinary workers: increased to a new minimum of R30.23 per hour (subject to the final gazetted rate).
• Expanded Public Works Programme (EPWP) workers: qualify for a lower required rate, typically set at a statutory proportion of the NMW (e.g., 55 % of the full rate).

This represents the first time the NMW crosses the R30 per hour threshold, up from the R28.79 per hour rate that applied from 1 March 2025.

Who Is Covered

The national minimum wage applies to almost all categories of employees in South Africa, regardless of industry, including:

• Permanent, part-time and temporary workers;
• Seasonal and casual workers;
• Shop assistants, security guards, cleaners, delivery workers and many others; and
• Workers in the informal and formal sectors.

There are limited exemptions for certain categories, such as some EPWP workers, who are subject to a lower statutory rate. Employers should verify whether any specific exemptions apply to their workforce.

Practical Implications for Employers

1. Compliance Is Mandatory

Employers must not pay employees less than the NMW for each ordinary hour worked. This obligation cannot be waived contractually or displaced by internal workplace policies.

Non-compliance attracts enforcement action by the Department of Employment and Labour, including compliance orders and potential penalties.

2. Calculation of Wage Entitlements

Minimum wage calculations should be based on ordinary hours actually worked, excluding overtime, allowances, tips or benefits in kind such as food or accommodation, unless these are specifically recognised as remuneration under law.

Part-time and casual employees are entitled to the same hourly minimum as full-time employees for each ordinary hour worked.

3. Sectoral Determinations and Bargaining Council Agreements

If a sectoral determination, bargaining council agreement or collective agreement prescribes a higher minimum, employers must pay the higher rate.

For example, many retail, hospitality, transport and other sectors have sector-specific minimum wage floors above the national minimum; these continue to apply.

4. Record-Keeping and Payroll Adjustments

Employers should:

• Update payroll systems to reflect the new rates before 1 March 2026;
• Audit employee classifications to ensure correct wage attribution;
• Review employment contracts and terms, particularly if employees transition between job categories with different pay scales; and
• Maintain accurate time and wage records for compliance verification.

Policy Context and Background

The NMW was introduced to protect vulnerable workers from unreasonably low pay and to promote social justice and a decent standard of living. Its annual review reflects contributions from business, labour, civil society and government.

The recommended increase for 2026 was based on factors such as inflation trends, cost-of-living pressures and stakeholder inputs, a process mandated by the Act and designed to ensure that wages keep pace with economic realities.

Labour unions and civil society organisations have broadly welcomed the above-inflationary increases, noting that they will benefit millions of low-wage earners, while business organisations have cautioned about potential cost pressures.

Enforcement and Dispute Resolution

Employers who underpay staff risk:

• Investigations and compliance orders by labour inspectors;
• Claims before the Commission for Conciliation, Mediation and Arbitration (CCMA);
• Civil claims for arrear wages; and
• Potential administrative or criminal sanctions.

Employees and their representatives may lodge complaints with the Department of Employment and Labour or refer disputes to the CCMA.

Conclusion

The annual adjustment to the National Minimum Wage effective from 1 March 2026 marks a significant development in South African labour law. Employers across sectors must ensure that wage and payroll practices are updated to comply with the new minimum requirements.

By aligning remuneration policies with statutory mandates, employers reduce compliance risk, support employee welfare and contribute to broader social and economic stability.