The South African Revenue Service (SARS) has lowered the interest rate Table 3 for interest-free or low-interest loans from 9.25% to 9.00%, effective from 1 October 2024,
following the Reserve Bank’s Monetary Policy Committee’s decision to cut the repo rate by 0.25%.
Under the new rules, a taxable fringe benefit is created when an employee takes on debt with no interest or at a rate lower than the official interest rate. The taxable amount is calculated as the difference between what would have been paid at the official rate and the actual interest paid by the employee.
The new rate follows a previous increase from 8.75% to 9.25%, which took effect on 1 June 2023.
