On the whole, living in South Africa is not all that different from living in Europe or North America from a financial standpoint. But there are fairly stark differences within specific spending categories, and it helps to be aware of those prior to your move so that you can be mentally prepared, adapt your lifestyle if necessary, and, if that is an option, negotiate certain cost of living adjustments with your employer.
Your biggest expenses are likely going to be housing, your car(s), and groceries.
Housing is not necessarily more expensive in South Africa than in comparable European or North American cities of like size. You can find housing in Johannesburg or Cape Town for as cheap as ZAR 5,000 a month. However, if you want to live in a secure estate that is walled in and manned by round the clock security, if you want to live where most expats live, and if you want to take advantage of the stunningly beautiful properties available in certain suburbs, your cost can be anywhere from ZAR35,000 upwards.
If you are renting, as most expats are, you should also know that most lease agreements have automatic inflation adjustments in the vicinity of 7% to 10% per year built into them, and there is typically a monthly levy to pay for estate maintenance and security. Despite all of this, housing is often the least of an expat’s concern, because most companies pay for it in full, as long as a price range is negotiated ahead of time.
Refer to our article on Choosing a Place to Live in South Africa for information on housing and options.
The cost of cars is much higher in South Africa than elsewhere. The same exact car may cost twice as much in South Africa as it would cost in the United States, due to high import duties. (Consult our article on What Expats Should Know about Buying a Car in South Africa).
As the cost of gasoline (petrol) is also higher (though not as high as in Europe), most expats look for smaller to midsize cars when moving to South Africa. Bear in mind though that you will likely want to travel extensively, often into the bush, so that a bigger 4x4 car might make sense. Again, many companies will pay for a car for their expats, so that you may only have to worry about the price of a second family car. Monthly fuel costs can run from ZAR1,200 to 2,000 depending on your size of car and daily commute.
Grocery prices are going to seem a little higher than what you are used to paying, but mainly because you will initially be looking for the foods you know from home, and because you will have to learn where to get the best prices. Once you get to know the local markets and start buying seasonal items, you will see your food bill go down.
However, bear in mind that if you employ a live-in domestic worker, you will be responsible for her provisions as well, adding to your monthly grocery bill. A family of four should plan to spend ZAR5,000 to 7,000 per month on groceries.
How you regard utility expenses in South Africa will depend on where you’re coming from. In general, you will pay more for water and electricity than in the United States, but not as much as in Europe.
If you live in an estate in a fairly large home, your monthly electricity bill will likely exceed ZAR2,000 and can run all the way up to ZAR5,000 during the winter (June, July, August) months. This is due to the bad insulation of South African homes and the fact that they are not really built to be heated. Some homes have under floor heating which is inefficient and expensive, and some don’t have any heating at all.
The cheapest alternative is often to buy a movable gas heater with an exchangeable propane bottle. Water heaters (geysers) are another culprit in electricity usage, and as a result many new homes are equipped with solar ones. It is worth looking into this when selecting a home as it can save you a good deal of money over the course of your expat assignment.
Water, waste water, and garbage removal are often bundled into one service that will cost you from ZAR800 to 1,500 a month, depending on the number of people in your household as well as the presence of a pool and/or sprinkler system.
Installing a cable box and paying for a bundle of channels at Multichoice will cost you around ZAR650 per month. However, more and more expats are bypassing cable by getting an uncapped internet connection and using DNS rerouting to stream online content from overseas. Even though it is negligible, you should also factor in the cost of a TV license, regardless of whether you get cable or not, which is ZAR265 per year.
Your internet connection and landline will cost you anywhere from ZAR800 to 1,300 per month depending on whether you actually decide in favor of a landline or not. Again, many expats are migrating towards uncapped internet to fulfill their telephony needs via Skype and other services, as landlines in South Africa are not very reliable and overpriced.
Mobile phones can vary greatly in price. On the low end you have pay-as-you-go plans that allow you to top up your account as needed for airtime, so that there is almost no fixed monthly fee, and on the high end you can have a 2-year iPhone subscription for ZAR500 a month or more, depending on the size of your data plan. The most popular and cost effective service is getting a Blackberry, offering unlimited browsing and messaging via BBM for as little as ZAR60 a month.
Refer to our article on TV, Internet and Phones in South Africa for information about connecting services and providers.
Expats are often faced with entirely new cost categories they didn’t have to deal with in their home country.
While your children might go to a public school in your home country, you will need to put them in a private or international school in South Africa. Most companies will pay a portion or all of your school fees, which can range from ZAR3,000 to 7,500 per child per month, but most likely you are responsible for uniforms, supplies, and class trips, which can easily add another ZAR1,000 per child per month.
While of course employing domestic help is entirely optional, most expats choose to do it. Expect to pay anywhere from ZAR3,000 upwards for a live-in, 5 days a week domestic worker, in addition to food as well as initial expenses to furnish a room, and a 2% monthly unemployment fund payment to the government.
Refer to our article on Hiring Domestic Help in South Africa for full information on hiring help in South Africa.
You might not have had such a large property before, and if you have, you might not have brought your lawn mower along. If you hire a garden service as many South Africans do, expect to pay anywhere from ZAR500 to 1,000 a month, depending on whether you have a swimming pool that needs to be maintained.
Ants are definitely a problem in South Africa, particularly during the summer months, so paying for monthly pest control is well worth it, even though it is quite pricey at around ZAR500 per month. Sometimes this is included in your rental agreement, so make sure to check.
Obviously this category is difficult to budget as it depends on your personal habits. In general, expats are pleasantly surprised by the low cost of eating out and some other forms of entertainment in South Africa, such as going to the movies.
On the other end of the spectrum, however, you will likely blow your budget on travel while living in South Africa. You will want to explore all that’s on offer not just in South Africa but in the surrounding countries, taking advantage of this once-in-a-lifetime opportunity. And you’ll discover that travel in Africa is not cheap, as most prices for accommodations are quoted on a per person basis, not per room, making it difficult for larger families to find affordable options. You can easily spend ZAR40,000 on a 3-day trip to the bush, but of course you can also do it for much less if you invest in some camping equipment and aren't opposed to a little bit of adventure.
Refer to our article on How to Pick a Safari Destination in South Africa to pick out your dream adventure.
If you want to join a gym, look at ZAR250 to 400 a month for that. Some of the medical aid providers such as Discovery offer gym discounts to their members.
Many expats are covered by health insurance policies in their home countries, and others receive an allowance to purchase a South African medical aid plan on their own. Make sure you know in which category you fall.
Make sure you cover your household goods, your vehicle, and your kids' musical instruments, if any. This can range from ZAR1000 to 1,500 depending on the number of household goods and the size of your car. You will also have to factor about ZAR180 per month for a vehicle tracking service that’s mandated for most luxury cars.
The best way to make your move to South Africa a success is to conduct a lot of upfront research to get an idea of what your spending will be, and to put together a budget as soon as you live there to see how you’re faring and make the necessary adjustments. But be careful to not simply look at it in an entirely utilitarian manner. South Africa is a beautiful country that most people flock to for its superior lifestyle. You won’t want to skimp too much on the beautiful lifestyle, and you’ll also want to make sure you live and move around in a secure manner, both of which will require a certain level of expense.
By Sine Thieme, an American repat just returned from a three-year assignment in Johannesburg with her husband an four children, where she loved the weather, the people, going on safari, and the fact that you never quite knew when exactly 'just now' would be.