Adhering to section 23(1) of the PAA, the AGSA recommended increase of tariffs rate in its strategic plan for 2012/13 which is calculated based on average staff costs per band and interval, mark up factor and recoverable hours. Despite the fact that the AGSA set a target of 2.07 per cent of revenue to achieve net surplus in 2012/13 the AGSA discounted its tariff rate from 7.1 per cent market rate to 5.6 per cent by 1.5 per cent amounting to R40.5 million. The increase in the average charge rate is determined by salary increase of 8.6 per cent in 2012/13 compared to 8.12 per cent for 2011/12. The 5.6 per cent of audit tariffs adjustment is influenced by the average staff costs per band and interval, mark up factor and recoverable hours.