Despite the economy still recovering from the fourth wave of Covid-19 infections, the Reserve Bank announced a second consecutive hike of the repurchase rate (repo rate) on Thursday, 27 January 2022. The SARB announced that the repo rate will increase by 25 basis points, from 3.75% to 4.0%, effective 28 January 2022.
This will affect employer loans by increasing the official interest rate from 4.75% to 5.0% effective 1 February 2022. SimplePay’s system uses the official interest rate to calculate the fringe benefit on employer loans, which is always set at 1% above the repo rate.
As always, you do not need to take any action to implement the new interest rate as we have already updated SimplePay to accommodate for this increase. All employer loans on payslips dated from 1 February 2022 will make use of the new interest rate. As our system is built to be intuitive, any payslips dated before 1 February 2022 will make use of the previous interest rate.
You can find more information on employer loans on our help page here.
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