The National Minimum Wage (NMW) is the lowest hourly rate of pay an employer may lawfully pay an employee in South Africa, set under the National Minimum Wage Act and reviewed annually.
What it means
Almost every worker is covered, with limited exceptions for specific categories the Act or a Ministerial determination carves out. Paying below the applicable rate is unlawful regardless of what an employment contract says, and an underpaid employee can claim the shortfall.
Where it fits in
Payroll systems need the current NMW rate to validate hourly-paid employees' pay and to determine ETI eligibility, since the incentive requires remuneration to meet either the NMW or an applicable wage-regulating measure. Some sectors are instead governed by a sectoral determination or collective agreement (a wage-regulating measure) that can set a different floor.
Key rules
- Rate is reviewed and typically adjusted annually, effective from 1 March each year.
- Applies per hour worked - monthly-paid employees still need an hourly-equivalent check.
- A wage-regulating measure (sectoral determination or collective agreement) can apply instead of the NMW for a specific sector.
- Underpayment relative to the applicable floor is a labour law contravention, independent of any tax consequence.
