SARS Late Payment Interest Rate 2026: Current Rate & How It Works

What Is the Current SARS Interest Rate?

As of January 2026, SARS charges interest on late tax payments at 11.25% per annum. This is the "prescribed rate" calculated as the South African Reserve Bank repo rate (7.75%) plus 3.5 percentage points.

This rate applies to all overdue tax amounts, including income tax, VAT, PAYE, UIF, and SDL. Interest accrues daily from the day after the payment due date until the outstanding amount is paid in full.

How Is SARS Interest Calculated?

SARS interest is calculated daily using the following formula:

Daily Interest = (Outstanding Amount x Annual Rate) / 365

For example, if you owe R100,000 in outstanding tax at the current rate of 11.25%:

• Daily interest = (R100,000 x 11.25%) / 365 = R30.82 per day
• Monthly interest (30 days) = R30.82 x 30 = R924.66
• Annual interest = R11,250

Use our SARS Interest Calculator to calculate the exact interest on your outstanding tax amount.

How Does the Prescribed Rate Change?

The prescribed rate is directly linked to the South African Reserve Bank repo rate. When the Reserve Bank changes the repo rate (typically at MPC meetings held every two months), the SARS prescribed rate changes by the same amount.

The formula is always: Prescribed Rate = Repo Rate + 3.5%

SARS publishes the updated rate in the Government Gazette, and the new rate takes effect from the date specified in the notice.

Can SARS Interest Be Waived?

No. Unlike penalties, SARS interest cannot be remitted or waived. There is no provision in the Tax Administration Act for the remission of interest. The only way to stop interest from accruing is to pay the outstanding tax amount.

This is why paying outstanding tax as quickly as possible is always the first priority — every day of delay adds to your interest bill.

Interest vs Penalty — What's the Difference?