Previous studies have decomposed South African income inequality into inequality between and within the population groups defined by the apartheid regime’s racial classification system. While a substantial fraction of total inequality can be attributed to differences in mean income levels between those population groups, the level of inequality within the racial groups has been found to contribute more to total inequality. Yet few investigations have attempted to elucidate inequality within these population groups. This study therefore explores the extent to which inequality in a joint sample of African and coloured individuals can be attributed specific labour-market related characteristics of their households or household heads. The analyses apply the Theil-L measure of inequality to the distribution of a consumption bundle in a household survey data set from 1995. The education level of household heads is the strongest single explanatory factor, followed by households’ main income sources. The race, age categories, or gender of household heads do not account for large fractions of inequality in this sample