How the prescribed rate is set
The Prescribed Rate of Interest Act 55 of 1975 supplies a rate when a debt carries interest but nobody agreed what it should be. Section 1(2)(a) sets the rate as the South African Reserve Bank repo rate plus 3.5 percentage points. Each time the Reserve Bank changes the repo rate, the new prescribed rate takes effect on the first day of the second month after the month of the decision. The repo rate went to 7.25% on 25 September 2026, so the prescribed rate moves to 10.75% on 1 November 2026.
The rate is fixed on the day interest starts to run. A debt that fell overdue in June 2026 stays at the rate that applied in June, even after the repo increases that followed. That is why the calculator asks for the start date first and looks up the rate from it.
Prescribed rate history
The Minister of Justice is required to publish each new rate in the Government Gazette, but the notices often appear months late. The table below applies the Act's formula to each repo decision. Gazetted figures are marked.
| From | Prescribed rate | Repo rate | Basis |
|---|---|---|---|
| 1 November 2026 | 10.75% | 7.25% | Repo increase of September 2026 |
| 1 July 2026 | 10.50% | 7.00% | Repo increase of May 2026 |
| 1 January 2026 | 10.25% | 6.75% | Repo cut of November 2025 (Gazette notice says 1 March 2026) |
| 1 September 2025 | 10.50% | 7.00% | Government Notice R.6668 of 2025 |
| 1 July 2025 | 10.75% | 7.25% | Repo cut of May 2025 |
| 1 March 2025 | 11.00% | 7.50% | Repo cut of January 2025 |
| 1 January 2025 | 11.25% | 7.75% | Repo cut of November 2024 |
| 1 November 2024 | 11.50% | 8.00% | Repo cut of September 2024 |
| 1 July 2023 | 11.75% | 8.25% | Government Notice 4075 of 2023 |
| 1 May 2023 | 11.25% | 7.75% | Government Notice 4075 of 2023 |
| 1 March 2023 | 10.75% | 7.25% | Government Notice 4075 of 2023 |
| 1 January 2023 | 10.50% | 7.00% | Government Notice 4075 of 2023 |
| 1 November 2022 | 9.75% | 6.25% | Government Notice 4075 of 2023 |
| 1 September 2022 | 9.00% | 5.50% | Government Notice 4075 of 2023 |
| 1 July 2022 | 8.25% | 4.75% | Government Notice 4075 of 2023 |
One date is uncertain. The repo cut to 6.75% was decided in November 2025, so under the Act the 10.25% rate starts on 1 January 2026. Government Notice 3887, published on 17 April 2026, states 1 March 2026 instead. For a debt that fell overdue in January or February 2026 the difference is a quarter of a percentage point; follow the date your attorney or the court applies.
Worked example: an invoice paid six months late
A plumbing supplier invoiced a contractor R85,000, due on 31 March 2026, with no interest term in the account application. The contractor paid on 30 September 2026, 183 days late. The prescribed rate in force on the due date was 10.25%, so the interest is R85,000 × 10.25% × 183 / 365 = R4,368.18, or about R23.87 a day. Had the contractor signed terms charging 2% a month, compounded monthly, the same delay would cost R10,754.97.
The in duplum rule
South African common law does not let arrear interest grow without limit. Once unpaid interest equals the unpaid capital, it stops accruing. On an R85,000 debt the ceiling is R85,000 of interest, for a maximum claim of R170,000. In Paulsen v Slip Knot Investments 777 (2015) the Constitutional Court held that the rule keeps applying after legal proceedings start, overturning the earlier view that interest could run unchecked while a case was pending.
For credit agreements under the National Credit Act, section 103(5) goes further: interest, fees and charges that accrue while the consumer is in default may not, together, exceed the unpaid balance of the principal debt at the time of default. If you sell to consumers on credit, that is the rule to work to.
Contract rates and your invoice terms
A rate agreed in writing beats the prescribed rate. Put the rate in your quotation or account terms and have the customer accept it before you supply. A monthly rate should be stated as such: 2% a month is 24% a year simple, and a little more if it compounds. The loan calculator shows what a given annual rate does to a balance over time, and if you invoice through our invoicing pages you can add the payment terms and interest clause to every invoice you send.
Using the figure in a letter of demand
Set out the capital, the due date, the rate and its basis, and the interest to a stated date, then the daily amount after that. The table above gives those numbers. Keep the capital and interest separate: a part payment is normally allocated to interest first and then to capital. Most ordinary debts prescribe after three years under the Prescription Act 68 of 1969, so do not leave an unpaid invoice untouched.
Frequently asked questions
What is the prescribed rate of interest in South Africa now?
10.50% a year from 1 July 2026, which is the repo rate of 7.00% plus 3.5 percentage points. After the Reserve Bank raised the repo rate to 7.25% in September 2026, the rate becomes 10.75% from 1 November 2026.
Which rate applies if it changes while the debt is unpaid?
The rate in force on the day interest begins to run. Section 1(1) of the Prescribed Rate of Interest Act fixes the rate "as at the time when such interest begins to run", so a later repo cut or increase does not change the rate on a debt that was already overdue.
Can I charge more than the prescribed rate on a late invoice?
Only if the customer agreed to a different rate, for example in signed terms and conditions, an accepted quotation or a credit application. The prescribed rate is the fallback where no agreement, law or trade custom sets one. Printing a rate on an invoice after the work is done does not by itself bind a customer who never accepted it.
What is the in duplum rule?
Arrear interest stops running once the unpaid interest equals the unpaid capital. On a R85,000 debt the most interest that can build up is R85,000. At 10.50% simple interest that point is about 9.5 years away. The Constitutional Court confirmed in 2015 that the rule also applies while a court case is running.
Does the prescribed rate compound?
No. Interest at the prescribed rate is simple interest on the capital. A contract can provide for compounding, in which case this calculator compounds monthly, but the in duplum ceiling still limits the total.
From when does interest run on an unpaid invoice?
Where the invoice or contract fixes a payment date, interest generally runs from the day after that date without any further demand. Where no date was agreed, it usually runs from the date the customer receives a demand for payment. Use the start date that matches your situation.
How do I work out interest per day?
Multiply the capital by the annual rate and divide by 365. On R85,000 at 10.25% that is R23.87 a day. Multiply the daily figure by the number of days late for simple interest, and stop once the total interest equals the capital.