While December is known for South Africa’s traditional 13th cheques, March delivers a second wave of bonus payouts, driving income spikes that shape savings, debt repayments, investments, and travel plans – particularly for high-income earners.
Standard Bank salary data reveals substantial lump sum payments in March, especially for those earning over R4 million annually, alongside private banking clients and young professionals.
“What stood out even more as we analysed the data was that, partly due to these large payouts, the monthly salaries of our wealthiest clients make up only about half of their total annual income – 51% – indicating their diverse income streams,” explains Shené Mothilal, Solution Owner of the Digital Money Manager at Standard Bank. “These clients often use their bonuses to invest in opportunities that further grow their wealth.”
Lower-income groups rely heavily on salaries, which make up an average of 86% of their total income. Their bonuses are typically spent on essentials like groceries, clothing, and entertainment. Middle-income earners also increase spending on groceries and clothing but focus more on transport and debt repayments, likely prioritising loan settlements and travel expenses.
In contrast, high-income earners allocate their bonuses more diversely, covering groceries, entertainment, and travel investments, even though holiday spending peaks in December. They also show a significant increase in payments to insurance companies, suggesting a focus on long-term savings and financial security.
The wealthiest segment – individuals earning over R4 million annually – use their March bonuses strategically, channelling funds into savings, investments, debt repayments, and travel plans, further solidifying their financial growth.
“When it comes to spending speed, lower- and middle-income customers tend to deplete their bonuses much quicker. While this is a trend we see in these income groups throughout the year, this does predominantly go towards essential spend like groceries and repaying debt,” adds Mothilal.
Doret Jooste, Standard Bank’s Head of Money Management and Advisory, acknowledges that many low-income earners face financial strain and depend on bonuses to bridge gaps in their budgets. To help them make the most of their windfall, she advises consulting a financial planner ahead of bonus season. This proactive approach can help identify opportunities to invest, save, and strengthen their financial position, rather than spending the entire bonus quickly.
“Paying off unsecured debt, like clothing accounts and credit cards can help give you a financial boost and free up cash on a monthly basis to start saving. The main thing is to take a moment before spending your bonus and look for opportunities you can take advantage of to get ahead with your finances,” says Jooste.
Jooste shares ways to make the most of your bonus:
- Pay off high-interest debt, such as credit cards or store accounts.
- Build emergency savings to create financial security and avoid accumulating more debt.
- Consider paying school fees upfront, which may allow you to negotiate discounts.
Compiled by Warren Hawkins
