IT Salaries – South Africa vs the USA

Skilled professionals continue to leave South Africa in search of higher salaries and better opportunities overseas.

The United States ranks among the most popular destinations for highly-qualified South African professionals, with others including Europe, Australia, and the United Kingdom.

Young professionals who previously emigrated to find jobs overseas told MyBroadband they were making almost three-times as much as they were in South Africa and had access to many more travel opportunities.

It should be noted that their cost of living was also higher, although in every case they said this cost was worth the reward.

With the state of the South African economy declining so drastically as a result of the national lockdown, many more South Africans may opt to emigrate once they are able to – especially if they cannot find jobs locally.

To determine how lucrative job opportunities are overseas compared to South Africa, we compared the average salaries of popular IT positions in South Africa and in the United States.

IT salaries comparison

We used figures from Indeed, PayScale, and Glassdoor to compare average pay in both countries.

The US figures are listed in dollars and are paired with a converted rand figure based on the exchange rate at the time of writing.

The average salaries for 10 popular IT jobs in South Africa and the United States are below.

Taxes and net earnings

It is clear that IT professionals in the United States earn far more than their counterparts locally.

When comparing salaries in different countries, however, there are also taxes to consider.

The amount of tax you pay in South Africa and the USA depends on how much you earn – placing you within different tax brackets.

The US Federal Income Tax is determined at the end of each year by the Internal Revenue Service (IRS).

Different brackets exist for single and married taxpayers, as well as for heads of households.

Below are the 2020 tax brackets for the United States, according to the IRS.

Below are the 2020/2021 tax bands for South African citizens, according to SARS.

Spending power

It is important to note that while those working in the United States are earning far more than those in South Africa, they are also spending more.

The cost of living in the US can vary greatly between states, cities, and coasts, and can therefore be difficult to compare.

For example, it is far more expensive on average to rent an apartment in New York than in Johannesburg.

The Big Mac Index can provide a rough idea of how currencies are valued against one another, but it is by no means an accurate tool for currency misalignment.

Not everything comes down to a comparison between salary and taxes – the cost of living makes a big difference in how good your salary actually is.

In a country like the United States, the cost of living can vary greatly between states, cities, and coasts, and can therefore be difficult to compare.

The salaries in the United States may be much higher than in South Africa, but it is also far more expensive to rent an apartment in New York than in most parts of Johannesburg.

While the Big Mac Index is by no means an accurate tool for currency misalignment, it does provide a rough idea of how currencies are valued against one another.

According to a report by BusinessTech, combining this data with GDP per capita finds that the rand in July 2020 was undervalued by 41% compared to the US dollar.

This figure is comparable with purchasing power, showing that purchasing power is greater in South Africa compared with the United States.

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