From 1 May 2026, the earnings threshold will increase to R269 600.90 per annum. Employees who earn below the new threshold will be entitled to stricter protections under certain provisions of the Basic Conditions of Employment Act (BCEA), the Labour Relations Act (LRA), and the Employment Equity Act (EEA). This represents an increase of R7 852.45 from the previous earnings threshold of R261 748.45.
What does this mean in practice? Employment terms and conditions for employees earning below the threshold must adhere to additional provisions in the BCEA regulating ordinary hours of work, overtime, meal intervals, daily and weekly rest periods, Sunday pay, pay for night work and pay for work on public holidays. On the other hand, employees earning above the threshold fall outside of the deeming provisions that apply to temporary employment services (labour brokers), and fixed-term employment provisions under the LRA. In the EEA, employees earning above the threshold also lose the option of referring unfair discrimination disputes to the CCMA for arbitration unless it is related to sexual harassment or all parties agree to arbitration.
It is worth understanding what "earnings" means in the context of the earnings threshold. It refers to an employee's regular annual remuneration before deductions, like income tax, pension, medical and similar payments, but it excludes any similar payments made by the employer in respect of the employee. Subsistence and transport allowances, achievement awards and payments for overtime worked do not count either. This is an important distinction because "earnings" in this context is not the same as "remuneration" in terms of the Ministerial Determination regulating the Calculation of Employee's Remuneration in terms of section 35(5) of the BCEA.
Naturally, with the threshold going up, more employees may fall below it, meaning that these employees will be entitled to the stricter protections, such as overtime payments. This, in turn, will have real financial consequences for employers. An assessment should be conducted by all employers to ensure that the increase and its consequences are accounted for in the workplace and, where necessary, that changes to employment contracts or remuneration structures are effected in order to mitigate the risks of any unintended contraventions of the BCEA or the deeming provisions applicable to atypical employment arrangements.
