Most Read

  • We Will Rock You tour of SA postpones to 2022
    Showtime Management and international partner Selladoor Worldwide have postponed the South African tour of the We Will Rock You musical to 2022. South Africa is currently in its third wave of Covid-19 infections and, as such, the government has implemented precautions that only allows for a total audience of 100 people.
  • 6 critical PoPIA compliance steps to take before 1 July
    The eleventh hour is upon businesses who are not Protection of Personal Information Act (PoPIA) compliant. The effective date of 1 July is upon us. By Rian Schoeman
  • #YouthMatters: Leigh-Anne Salonika, founder of OnlyKind
    From East London to some of South Africa's most storied agencies. After winning on global stages and achieving what she set out to on the inside of the corporate advertising machinery, Leigh-Anne Salonika is living her purpose, and in doing so working with brands to unlock theirs By Evan-Lee Courie
Show more
Business services


More...Submit news
Advertise on Bizcommunity

Subscribe to industry newsletters

Why sector definitions are important for earnings experts

A key differential should be made between the informal, formal and corporate sectors of employment in South Africa.
Jaen Beelders
The informal sector refers to a subset of unincorporated enterprises comprising those that produce at least some output for the market; and are less than a specialised size in terms of the number of persons engaged or of employees employed on a continuous basis; and/or not registered under specific forms of national legislation, such as factories, or commercial acts, social security laws, professional groups’ regulatory acts, or similar acts, laws or regulations established by national legislative bodies.

Formal sector employment and business are made up of all employing businesses that are registered in any way. The formal sector includes government, parastatals, registered non-governmental organisations and private businesses that are registered for either income tax or VAT.

Often Earnings Experts illustrate earnings scenarios that distinguishes between formal and corporate sector. This should not be the case since the formal sector comprises micro, small, medium and corporate companies. Corporate is defined as a legal entity that is separate and distinct from its owners and founders. A corporate has the same rights and responsibilities that an individual possesses. The term 'corporate' has become synonymous with large business in South Africa and not defined by its legal standing. Considering the term corporate as a proxy for size and financial turnover, the following characteristics would constitute the definition of corporate in South Africa:
  • Registered legal entity with shareholders.
  • Organisations that trade across multiple territories.
  • More than 250 employees.
  • Geographical operations.

Figure 1. Labour market sectors

Earnings experts would find it beneficial to rather segment the formal sector, as illustrated above, instead of comparing the formal sector to corporate employment. This would also assist in guiding the election of earnings resources to be used.

About the author

Jaen Beelders is a Senior Analytics Advisor at 21st Century.



Let's do Biz