Update 29 July 2020: We have updated the system to reflect the changes to employer loans benefit calculations. All employer loans on payslips dated from 1 August 2020 will make use of the new interest rate. As our system is built to be intuitive, any payslips dated before 1 August 2020 will make use of the previous interest rate.
In a historic, yet somewhat expected announcement, the Monetary Policy Committee has cut the repurchase rate (repo rate) by 25 basis points. This brings the repo rate to an all-time low of 3.50% per annum, effective as from tomorrow (24 July 2020).
The official interest rate, which is used to calculate employer loan benefits, is set at 1% above the repo rate. The new official interest rate will therefore be 4.5% per annum, effective 1 August 2020. Although the change in the repo rate is effective tomorrow, income tax legislation prescribes that changes in the official interest rate only occur at the start of a new month.
Being a SimplePay client means that you’ll benefit from updates to the system without having to install these updates or make any manual changes to your settings. You simply process payroll as normal and our system will use the correct official interest rate for the period of the payslip. Our development team are busy making the necessary system updates for the latest interest rate change and we’ll let you know as soon as they’re ready. This means that you should not yet finalise payslips for August for those employees with outstanding employer loans.
For more information on employer loans, head to our help page.
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