Implications for Employees Earning more than the New Earnings Threshold

By Ali Sonday | Senior Associate

New Earnings Threshold For 2025/2026

Effective from 1 April 2025, the earnings threshold, which is determined by the Minster of Employment and Labour from time to time in terms of section 6(3) the Basic Conditions of Employment Act of 1997 (“the BCEA“), will increase from R254,371.67 per annum (approximately R21,197.63 per month) to R261,748.45per annum (approximately R21,812.37 per month).

The effect of the earnings threshold is that the limitations, protections or the right to additional pay afforded by certain provisions of the BCEA do not apply to employees earning in excess of the new threshold. These provisions (“the relevant provisions“) are:

• Section 9 – hours of work;
• Section 10 – overtime;
• Section 11 – compressed working week;
• Section 12 – averaging of hours;
• Section 14 – meal intervals;
• Section 15 – daily and weekly rest periods;
• Section 16 – pay for work on Sundays;
• Section 17(2) – night work; and
• Section 18(3) – public holidays on which the employee would not ordinarily work.

It is important to note, that for purposes of the earnings threshold, “earnings” means the regular annual remuneration before deductions, i.e., income tax, pension, medical and similar payments, but excluding similar payments (contributions) made by the employer in respect of the employee. Subsistence and transport allowances received, achievement awards and payments for overtime worked are not regarded as “earnings” for the purpose of the earnings threshold.

Employers need identify those employees earning below and above the earnings threshold. Those employees who earn below the earnings threshold are afforded the protection in terms of the relevant provisions of the BCEA.

Should those employees earn below the threshold and are refused/denied the protection and benefits afforded to them in terms of the relevant provisions, such employees may refer claims for non-payment in terms of section 73A of the BCEA to the CCMA.

Employers should always stay alert and keep up to date when the new earnings threshold. This becomes very important especially in instances where employees earn above the threshold, but after the new earnings threshold takes effect said employees are then earning below the threshold. This in effect means that these employees who were previously excluded from benefiting from these relevant provisions, now join the ranks of those who are entitled to additional compensation for overtime, work on public holidays and Sundays and etc.