Dear X3 HR and Payroll User,

The repurchase rate (repo rate) has decreased from 4.25% to 3.75% on 22 May 2020. As from June 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%

= 3.75% + 1%

= 4.75%

 https://www.resbank.co.za/Research/Rates/Pages/CurrentMarketRates.aspx

Please update the official interest rate on Folder/Legislation values applicable from June 2020 in all relevant folders.

Version 9

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

Create a new “valid from’ date 06/01/20 by copying the latest values. The Folder value for the variable INT_RATE – Official interest rate should be changed to 4.75 effective 1 June 2020.

Version 12

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

Create a new “valid from’ date 06/01/20 by copying the latest values. The Legislation value for the variable INT_RATE – Official interest rate should be changed to 4.75 effective 1 June 2020.

Please note that a payroll plan patch will not be sent out with this change.

Kind Regards 

X3HR and Payroll Support Team