What bosses need to know about the 2026 review of the minimum wage act

South Africa’s National Minimum Wage Act, in force since 2019, continues to set the pace for wage policy and business costs. As the clock ticks down to the next adjustment in 2026, employers face a moment of both financial planning and policy uncertainty.

SA’s National Minimum Wage Act has been in force since 2019 and continues to shape the wage landscape for employers across all industries. The legislation sets the statutory floor below which no employee may be paid, and requires annual adjustments to ensure the wage remains relevant in light of economic pressures.

For employers, the review of the minimum wage for 2026 is an important development, not only because it will affect payroll costs, but also because it highlights the government’s broader policy direction around fair pay and equity.

Current wage levels

The current minimum wage, effective 1 March 2025, is R28.79 per hour, translating to about:

• R4,737 per month (38-hour work week)
• R5,610 per month (45-hour week)

This year’s 4.4% increase kept pace with inflation, in line with the National Minimum Wage Commission’s CPI-plus approach. By contrast, 2024 saw a much steeper 9.62% jump.

Importantly, domestic and farm workers, once paid less, are now aligned with the national standard. Exemptions remain for the defence force, National Intelligence Agency and the secret service.

Public input extended

The deadline for public submissions on the 2026 review was extended to September 30, and the commission also called on stakeholders to complete an online survey and questionnaire that will be considered in the final report, after which it will make recommendations to employment and labour minister Nomakhosazana Meth. 

Although the precise figure is not yet known, projections suggest an increase for next year of at least 3%, which would bring the minimum wage to about R30 per hour or higher.

The 2026 adjustment is also important because it concludes the commission’s current medium-term framework of guaranteeing above-inflation increases. Beyond 2026 the commission may introduce a new methodology that ties adjustments more closely to average or median wages in the economy.

Balancing act: pressures and priorities

When setting adjustments, the commission weighs several factors:

• Inflation and cost of living — to preserve purchasing power
• Economic performance — GDP growth, productivity and unemployment
• Collective bargaining outcomes — sector-level deals as benchmarks
• Employer capacity — especially small and medium businesses facing tight margins
• Social justice — reducing wage inequality remains central to the Act

Why employers should act now

Employers should view the call for written submissions on potential adjustments to the national minimum wage as an opportunity to put forward practical concerns about affordability, the effect on margins and sustainability, and the potential knock-on effects for employment. Industry-specific submissions are especially valuable as they help the commission understand how wage increases affect different sectors.

Meanwhile, employers should prepare for at least a moderate increase in wage costs from March 2026. While the precise rate will be determined only after consultation, businesses would be well advised to model scenarios of 3%-5% increases in payroll costs. It is also prudent to monitor developments at Nedlac, where possible structural amendments to the Act itself are under discussion.

The National Minimum Wage Act remains a cornerstone of SA’s labour policy. For employers compliance is not optional, and the financial implications of annual increases must be carefully managed. Employers have had a chance to influence the debate and ensure their sector’s voice is heard. Looking ahead, the 2026 adjustment will not only affect payroll but may also signal a shift in how wage policy is structured in the years to come.

• The authors are directors at Werksmans Attorneys.