NOVEMBER 2022 – SOUTH AFRICA
OFFICIAL INTEREST RATE
It is important that employers note the following:

Increase to official interest rate announced
The Monetary Policy Committee (MPC) of the South African Reserve Bank (SARB) has increased the repurchase (repo) rate by 75 basis points. The announcement was made on Thursday, 24 November 2022.

The repo rate has been raised by 75 basis points to 7% per year, effective from 25 November 2022. This means that the rate at which the SARB lends to your bank has risen from 6.25% to 7%.

For employers, the official interest rate applicable to payrolls will be 8%, effective from 1 December 2022.

The definition of “official interest rate” in the Seventh Schedule of the Income Tax Act means:
• In the case of a loan which is denominated in the currency of the Republic, the South African repo rate + 100 basis points; or
• In the case of a loan which is denominated in any other currency, the South African repo rate applicable in that currency + 100 basis points.

Where a new repurchase rate or equivalent rate is determined, the new interest rate applies for the purposes of this definition from the first day of the month following the date on which that new repurchase rate or equivalent rate comes into operation.

To view the MPC’s statement, follow the link.

Please note
The implementation of this change requires an update of the payroll system parameters. If this is not done, you may incur penalties and interest.

If you are unsure of how to make the change, please contact your consultant for assistance.

Contact our legislation team at info@crs.co.za if you require any additional information. 

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