Dear X3 HR and Payroll User,

The repurchase rate (repo rate) has decreased from 5.25% to 4.25% on 15 April 2020. As from May 2020, the ‘low or interest free loan/debt’ fringe benefit should be calculated by using the new ‘official interest rate’.

The ‘official interest rate’ as defined in section 1 of the Income Tax Act:

= repo rate + 1%

= 4.25% + 1%

= 5.25%

Please visit the following link for more information : https://www.resbank.co.za/Research/Rates/Pages/CurrentMarketRates.aspx

Please update the official interest rate on Legislation values applicable from May 2020 in all relevant folders. A payroll plan patch will not be sent out with this change, but will be included in the next payroll plan patch released for South Africa.

 Version 9

Access: Payroll > Entry of values > Folder values > RSA Tax Info tab

Create a new “valid from’ date 05/01/20 by copying the latest values. The Folder value for the variable INT_RATE – Official interest rate should be changed to 5.25 effective 1 May 2020.

Version 12

 Access: Payroll > Entry of values > Legislation values > Legislation ZAF > RSA Tax Info tab

Create a new “valid from’ date 05/01/20 by copying the latest values. The Legislation value for the variable INT_RATE – Official interest rate should be changed to 5.25 effective 1 May 2020.