SARS reduced the official interest for taxing low- or no-interest loans.
The South African Revenue Service (SARS) has updated its Table 3, reducing the official interest rate used to tax interest-free or low-interest loans from 8.00% to 7.75%, effective 1 December 2025.
Under the Income Tax Act, a taxable fringe benefit arises when an employee owes a debt to their employer—or to a related entity arranged by the employer—and pays interest below the official rate. The difference between the official rate and the interest actually paid is treated as a taxable benefit.
The new rate reflects the South African Reserve Bank’s decision on 20 November 2025 to cut the repo rate by 25 basis points. Previously, the official rate had been lowered from 8.25% to 8.00% on 1 September 2025.
| DATE FROM | DATE TO | RATE |
| 01.12.2024 | 31.01.2025 | 8.75% |
| 01.02.2025 | 31.05.2025 | 8.50% |
| 01.06.2025 | 31.08.2025 | 8.25% |
| 01.09.2025 | 30.11.2025 | 8.00% |
| 01.12.2025 | Until change in Repo* rate | 7.75% |
SARS notes that the official interest rate is linked to the Reserve Bank’s repo rate plus one percentage point and changes take effect on the first day of the month after a new repo rate is implemented. The published table also outlines historical rates dating back to March 1985, providing clarity on the evolution of rates for income tax purposes.
