Recent earnings figures from Statistics South Africa’s Quarterly Employment Survey indicate that certain areas of the public sector continue to offer significantly higher pay than the national average. Among all government-linked categories, employees working within extra-budgetary institutions recorded the highest average monthly earnings during the third quarter of the year.
Key Takeaways
- Extra-budgetary institutions lead public sector pay: Agencies such as SARS, the CCMA, the RAF and the UIF record the highest average salaries within government, with earnings exceeding R56,000 per month.
- Flexible funding models support higher remuneration: The ability of many EBIs to retain portions of collected revenue allows them to attract specialised skills and maintain pay structures above traditional government departments.
- Earnings trends reflect recent financial conditions: QES data from July to September 2025 highlights how remuneration levels are influenced by both institutional structure and broader economic and fiscal pressures.
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Extra-Budgetary Institutions and Why They Pay More
Extra-budgetary institutions are public entities that function outside the traditional parliamentary budgeting framework but still carry out essential functions on behalf of the national government. Although they operate with a degree of independence, they remain classified within the broader government sector for reporting and statistical purposes.
Prominent examples of these institutions include the South African Revenue Service, the Commission for Conciliation, Mediation and Arbitration, the Road Accident Fund and the Unemployment Insurance Fund. These bodies play central roles in revenue collection, labour dispute resolution, social protection and compensation systems across the country.
Many EBIs are allowed to retain a portion of their collected revenue, which can support higher pay structures and specialist recruitment.
According to the latest QES remuneration data, workers in these institutions earned an average of R56,413 per month during the third quarter of the year. This places them at the top of the earnings table within the public sector and above many private sector categories.
The QES figures reflect salary trends recorded between July and September 2025, offering a snapshot of pay movements during the latter part of the financial year.
How Extra-Budgetary Institutions Compare With Other Sectors
When measured against the wider economy, extra-budgetary institution employees ranked as the fifth-highest earners overall during the quarter. Their average pay trailed only those working in technology-related services, electricity and water utilities, and financial intermediary industries, which continue to dominate the upper end of the salary scale.
Despite this ranking, EBIs are not the only public sector employers offering above-average remuneration. Across all levels of government, average earnings exceeded the formal non-agricultural wage benchmark, which stood at R29,490 for the same period.
The public sector remains one of South Africa’s largest sources of employment, with more than 1.3 million individuals currently working within the state system. This includes national and provincial departments, municipalities, educational institutions and various government-linked agencies.
Over the long term, state employees have benefited from wage growth that has regularly outpaced inflation. Although salary increases were temporarily restrained during the height of the Covid-19 crisis, collective bargaining agreements have since returned to above-inflation adjustments.
Budget Pressure From Rising Public Sector Wages
In the national budget approved for 2025, the National Treasury was required to allocate substantial additional funding to cover the expanding government wage bill. Employee compensation continues to represent one of the largest expenditure items in the fiscal framework.
For the current year, government and labour unions agreed to a 5.5 percent salary increase for public servants. This settlement exceeded the assumptions made in both the 2024 Budget and the Medium Term Budget Policy Statement.
Treasury estimates indicate that the agreement will add R7.3 billion to state expenditure in the 2025/26 financial year. The cost is expected to rise further to R7.8 billion in 2026/27 and reach R8.2 billion in 2027/28, placing sustained pressure on public finances.
Wage agreements are multi-year commitments, which limits government’s ability to reallocate spending during economic downturns.
Salary Growth Across Government Sectors
A year-on-year comparison of average earnings across government segments shows notable variation in salary growth rates.
Average Monthly Earnings by Government Sector
| Sector | Average monthly earnings Q3 2024 | Average monthly earnings Q3 2025 | Change (%) |
|---|---|---|---|
| Extra-budgetary institutions | R53 112 | R56 413 | 6.2 |
| National departments | R36 645 | R40 424 | 10.3 |
| Provincial departments | R34 801 | R36 777 | 5.7 |
| Universities and technikons | R33 646 | R35 372 | 5.1 |
| Local government | R31 190 | R31 734 | 1.7 |
| TVET colleges | R29 359 | R31 158 | 6.1 |
| South African average (all sectors) | R28 274 | R29 490 | 4.3 |
Concerns Over Efficiency and Sustainability
More than 30 percent of the 2025 national budget, equivalent to R814.5 billion, has been allocated to compensation of employees. This level of spending continues to draw scrutiny from economists and international institutions.
Research by the International Monetary Fund and the World Bank suggests that South Africa’s public sector wage bill consistently absorbs between 12 and 13 percent of gross domestic product. This places the country among those with the highest government wage burdens globally.
A report by the Centre for Risk Analysis found that South Africa ranks third among 20 major economies when comparing government wage bills as a share of GDP. The analysis further noted that the local public sector wage bill exceeds the Organisation for Economic Cooperation and Development average by approximately 3.5 percent.
Efficiency and Productivity Concerns
Economist Dawie Roodt has argued that inefficiency within the state remains a critical concern. While acknowledging that not all public servants fall into the same category, he has maintained that a significant proportion of individuals receiving state salaries are overcompensated relative to productivity.
Measuring productivity in public administration is inherently difficult, which fuels ongoing debate over wage value.
Roodt has highlighted the contrast between the roughly two million people employed by the state and the approximately 28 million South Africans dependent on social grants. He has also expressed concern over proposed expansions of state-led systems, including National Health Insurance, which he views as fiscally unworkable in the absence of stronger economic growth.
Sustainability of Current Spending Levels
From this perspective, the central challenge facing South Africa is the lack of efficiency within the public sector. Without a material increase in economic output, current spending levels are viewed as unsustainable and likely to worsen over time.
The attractiveness of government employment among young people has also been cited as a symptom of the problem, with public sector jobs often perceived as offering higher pay and lighter workloads than many private sector roles.
Job security and predictable income are key drivers of public sector preference during weak economic cycles.
Roodt’s assessment extends across all spheres of government, including municipalities, state-owned enterprises and national and provincial departments. In his view, the scale of public sector employment combined with widespread grant dependency places an excessive burden on the economy.
The broader conclusion drawn from this analysis is that without meaningful economic growth and productivity gains, South Africa cannot sustain a system where such a large share of the population depends directly on state spending.
Conclusion
The latest Quarterly Employment Survey data highlights how extra-budgetary institutions occupy a unique and financially advantaged position within South Africa’s public sector. Their semi-independent operating models, access to retained revenue and reliance on specialised skills continue to translate into higher average earnings than those found in most government departments and many private sector industries. While this underscores the importance of these institutions in delivering critical state functions, it also adds to the broader debate around public sector pay, fiscal sustainability and the growing pressure placed on the national budget by compensation costs.
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