The South African Reserve Bank (SARB) has published an update to the repo rate, which impacts the official rate of interest for calculating the taxable benefit on low-interest or interest-free loans. The new rate is effective from 1 December 2025.
Legislative summary of changes
- According to paragraphs 2(f) and 11 of the Seventh Schedule to the Income Tax Act, when an employee owes money to their employer at a rate lower than the official rate of interest, the difference between the employer’s rate (if any) and the official rate of interest is treated as a taxable fringe benefit.
- The official rate of interest is defined as the South African repurchase rate (repo rate) plus 100 basis points (1%).
- Following the repo rate decrease from 7.00% to 6.75% on 21 November 2025, the official rate of interest has been adjusted from 8.00% to 7.75%, effective 1 December 2025.
Additional information and resources
- Click here to access the official publication.
- Please refer to release note 16991 titled Calculation changes | Decrease in official rate of interest.
Should you have any questions regarding the South Africa | Official rate of interest change December 2025, please feel free to visit our Support page for more ways to get in touch, or email us at [email protected]
The Deel Local Payroll Team