Under the mounting pressure of rising global inflation, central banks around the world have been tightening their monetary policies. The South African Reserve Bank has correspondingly reacted to this inflation by hiking the repurchase rate by a further 75 basis points, effective from 22 July 2022. The repurchase rate will thus increase from 4.75% to 5.5%, marking this as the steepest hike since September 2002.
Since the official interest rate is set at 1% above the current repurchase rate, it will also increase from 5.75% to 6.5%, with effect from 1 August 2022. This will impact the fringe benefits calculated on the Employer Loan item on SimplePay, which is pegged to the presiding official interest rate.
As part of our ongoing dedication to keep your business compliant and your payroll simple, we have already updated our system to take the increase into account. From 1 August 2022, all employer loan items on payslips will automatically incorporate the new interest rate. Payslips dated before 1 August 2022 will remain unaffected.
You can find more information on employer loans on our help page here.
If you have any queries regarding SimplePay or any of our services, please feel free to contact us on [email protected]
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