NATIONAL MINIMUM WAGE DUE TO INCREASE 2026

EOHCB National
Oct 8
3 min read

The personal care industry - made up largely of micro and small enterprises (MSEs) - is calling on the National Minimum Wage Commission to take a measured approach when determining the 2026 national minimum wage. Industry leaders are urging that the increase be set below the Consumer Price Index (CPI) inflation rate to protect small businesses, preserve jobs, and ensure the sector’s long-term survival.

Small Businesses Under Strain

South Africa’s economy remains under significant pressure. Economic growth for 2025 is expected to hover around just 1% to 1.5%, reflecting the country’s ongoing stagnation. For small businesses in the personal care sector - such as hair, beauty, and grooming salons - this slow growth translates into weaker consumer demand and limited capacity to absorb additional costs.

“Micro and small businesses in our sector operate on extremely thin margins,” said A. Buck, National President of the EOHCB. “Even modest wage increases above inflation can push employers to the brink, leading to job losses or business closures.”

The sector continues to face challenges from rising energy costs, unreliable infrastructure, and cautious consumer spending. Food inflation reached 5.2% in August 2025, far above the headline CPI of 3.3%, leaving households with less disposable income for personal care services.

A Balanced Approach: Below-CPI Wage Increase

The industry believes that a below-CPI adjustment is not only reasonable but necessary to prevent further strain on micro and small businesses. A lower increase would strike a balance between maintaining worker livelihoods and keeping employers afloat in a fragile economic climate.

Research and official reports support this view. The National Minimum Wage Commission (2025) acknowledged the challenge of balancing fair wages with small business sustainability. Studies consistently show that wage hikes exceeding real economic growth can unintentionally reduce employment, especially in low-margin industries like personal care.

Unfair Burden of Pension Fund Contributions

A growing concern among personal care employers is the planned exclusion of pension fund contributions from wage calculations. Employers in the sector already contribute to pension funds through the industry’s bargaining council - a sign of their commitment to employee welfare and social responsibility.

However, excluding these contributions from minimum wage calculations would unfairly penalise responsible employers, effectively raising their labour costs compared to businesses that do not provide such benefits. “We want to continue doing the right thing for our employees,” explained K. Govender, National Treasurer of the EOHCB, “but policy changes like this make it harder for responsible small employers to stay competitive.”

The sector urges government to recognise pension fund contributions in the minimum wage structure or consider compensatory measures to restore fairness across small enterprises.

Protecting Jobs, Promoting Stability

Despite economic pressures, the personal care sector remains a major source of employment, particularly for women and youth. A conservative wage adjustment will help protect these jobs and ensure that small businesses can continue operating sustainably.

“This is not a call to undervalue workers,” emphasised S. Havenga, Vice President of the EOHCB. “It’s a call for balance - to ensure that wage increases reflect real economic conditions and keep small businesses alive, which in turn keeps people employed.”

A Call for Partnership

The personal care industry stands ready to work with policymakers, trade unions, and government to find fair, practical solutions that support both employers and employees. A thoughtful, below-CPI wage adjustment for 2026 would demonstrate that partnership - recognising the realities facing South Africa’s small business community while preserving the dignity of work.

EOHCB Submission obo of Members to the National Minimum Wage Commission -