Official Interest Rate Change for Employer Loans

In the ongoing battle to bring the South African economy in line with global inflation rates, the South African Reserve Bank has announced another increase in the repurchase rate (repo rate). The repo rate was increased by a further 50 basis points at this sitting, as opposed to the expected 25 points, effective from 31 March 2023. This takes the repo rate from 7.25% to 7.75%.

Since the official interest rate is set at 1% above the current repo rate, the interest rate will increase from 8.25% to 8.75%, effective from 1 April 2023. This increase will impact the fringe benefits calculated on any Employer Loan item on SimplePay, which is tied to the presiding official interest rate.

SimplePay has already made the necessary changes to take the increase into account. In line with our ongoing commitment to making your payroll simple and compliant, all Employer Loan items on payslips from 1 April 2023 will automatically incorporate the new interest rate. Payslips dated before this date will remain unaffected by this change. 

If you need help setting up our Employer Loan item, you can visit our help page for guidance and additional information. 

Should you have any questions around this or your SimplePay profile, please feel free to contact us on support@simplepay.co.za. 

If you are not yet a SimplePay customer, but want to experience simple and compliant payroll, we recommend signing up for a free trial. Experience payroll the simple way for 30 days! 

Take care,

Team SimplePay