The Official Interest Rate for calculating Fringe Benefits increased by 0.25 % effective 23 November 2018.
Where an employer gives an employee a loan that is less than the official interest rate or interest free, the difference between the two must be treated a taxable Fringe Benefit.
This Fringe Benefit should be processed via the payroll and reported on the Employees IRP5 against SARS Code 3801.
The Official Interest Rate is defined in the Seventh Schedule as the rate of interest that is equal to the Repo Rate, plus 100 basis points (1%).
The repo rate increased to 6.75% on the 23 November 2018, and the official interest rate therefore became 7.75% effective 23 November 2018.
Please note that HRTorQue Outsourcing have updated all their payroll outsourcing clients effective 1 December 2018.