National minimum wage 2026: what employers must know

In terms of the National Minimum Wage Act 9 of 2018 (NMWA), the National Minimum Wage Commission annually reviews the national minimum wage (NMW) and submits a recommendation to the Minister of Employment and Labour to adjust it. Following the latest review, the Minister published the adjusted national minimum wage in the Government Gazette:  effective 1 March 2026, the national minimum wage is R30.23 per hour for ordinary hours worked.

The Commission continues to consider factors such as inflation, the consumer price index (CPI), cost of living, collective bargaining outcomes, employment levels and the broader economic environment when making a recommendation. While the rate of the consumer price index CPI remains an important benchmark, the adjustment is not purely formula driven and may vary from a strict CPI plus calculation. This latest adjustment was calculated using CPI plus 1.5% on the previous NMW rate of R28.79 per hour.

Exemption from paying the national minimum wage

The NMWA recognises that exceptional financial hardship may justify temporary relief in the form of receiving exemption from paying the full NMW rate for a specific time period. Section 15 of the NMWA allows employers to apply for exemption through the Department of Employment and Labour’s online system. However, exemption is not automatic and is treated as an exceptional remedy.

Key requirements of an employer applying for exemption include:

• Providing a clear and substantiated reason for the application.
• Demonstrating that meaningful consultation took place with every representative trade union(s), or if there is no such trade union that affected workers have been meaningfully consulted with.
• Submitting comprehensive financial information showing genuine affordability constraints. The Regulations prescribe objective financial tests relating to profitability, liquidity and solvency. The calculation methodology for these indicators is set out in the Schedules to the Regulations and must be supported by credible financial statements.

Importantly, exemption will only be considered if the employer is fully compliant with statutory obligations, including registration and up-to-date contributions to the Unemployment Insurance Fund (UIF), compliance with the Compensation for Occupational Injuries and Diseases Act (COIDA) administered by the Compensation Fund and any other applicable statutory levies.

If exemption is granted, the employer will have to pay the wage prescribed by the Department of Employment and Labour in the exemption letter. Employers can however still expect to pay at least 90% of the national minimum wage. Exemption is only valid for a maximum period of up to 12 months and employers can expect that the period of exemption will also be stipulated in the exemption letter.

Online application process

Applications must be done online for exemption at http://nmw.labour.gov.za. In most cases, the outcome is generated immediately. Certain applications may be flagged for audit, which must be finalised within 30 days of submission.

If approved, the exemption certificate will specify the commencement date, the period of validity, the authorised wage rate during the exemption period and any additional conditions attached.

Employers are legally required to display the exemption certificate prominently at the workplace and provide copies to affected employees and representative trade union(s). If the application is refused, written reasons will be provided.

Disputes and enforcement

A dispute over non-compliance with the NMWA can land the employer in hot water with the Department of Employment and Labour. If an employer fails to comply with the NMWA, the employer can be fined:

• First time offenders: Fined an amount equal to twice the value of the underpayment or twice the monthly wage, whichever is greater.
• Repeat offenders: Fined an amount equal to thrice the value of the underpayment or thrice the monthly wage, whichever is greater.

A strategic approach to compliance

South Africa’s labour framework is detailed and enforcement driven. While minimum wage increases place pressure on already constrained businesses, non-compliance exposes employers to significant legal and financial risk.

Employers are advised to conduct regular wage audits, ensure statutory registrations remain current, and plan proactively for annual adjustments. Exemption should be viewed as a short term relief mechanism in genuine cases of distress, not a substitute for sustainable workforce planning. Sound labour law compliance remains a critical component of responsible and resilient business management.

Not all employers are subject to the NMW rate and employers should make sure they pay the correct wages in terms of the employer’s specific industry/sector.  Payroll systems, contracts and budgeting should also align with the current prescribed rate.

Employers should consult with a representative of the LWO to ensure that they pay at least the current minimum wage applicable to their industry for the period of the payment concerned.

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