The South African Reserve Bank’s Monetary Policy Committee (MPC) has announced a further reduction of the Repo Rate, cutting it by 25 basis points effective 20 November 2025. This marks the fourth rate decrease for the year.
The Repo Rate, which is the benchmark interest rate at which the Reserve Bank lends to commercial banks, will now stand at 6.75%, and the prime lending rate will adjust accordingly to 10.25%.
In terms of section 1(1) of the Income Tax Act 58 of 1962, the SARS “official rate of interest” applies where an employee receives a low-interest or interest-free loan from their employer.
The fringe benefit is calculated as the difference between the interest that would have been payable at the official rate and the interest actually charged.
As this official rate is defined as the Repo Rate + 100 basis points (1%), it will be adjusted to 7.75% with effect from 1 December 2025.
