Increase to official interest rate announced

Share This Post

The Rate of Interest for calculating the Fringe Benefit Value on an Employer provided

low or no interest loan has increased by 0.25% effective 1 December 2021

Where an Employer provides an Employee with a loan and either charge zero interest or a rate that is below the Official Rate of Interest, the difference between the two (ie the benefit to the Employee) must be treated as Taxable Fringe Benefit.

This Fringe Benefit should be processed via the payroll and reported on the Employees’ IRP5 against SARS Code 3801.

The Official Rate of Interest is defined in the Seventh Schedule as the rate of interest that is equal to the Repo Rate, plus 100 basis points (i.e. 1%).

The Repo Rate has Increased to 3.75% as of the 19th of November 2021, and the Official Rate of Interest, therefore, has increased to 4.75% effective 1st of December 2021, ie the first day of the month following the announcement.

For more information on the above topic, please contact the LabourNet Helpdesk at

0861 LABNET (0861 522638).

Not yet a LabourNet client, but would like to know more about our service and products?

Email us:

More To Explore

Leave & Bobus Runs

Leave and Bonus Runs

Many employers are preparing for their leave and bonus runs as the holiday season draws near. Compliance remains key to a successful pay run especially when bonuses are being paid

Payroll Software digitisation and Automation

Payroll Software digitisation and Automation

There are 2 methods in which one is able to do monthly payroll: Manually, or automatically. Manually – is having to manually calculate your payroll Automatically – is having a