Total Medical Credit: R 0.00

Breakdown:

Medical Scheme Fees Tax Credits (Section 6A): R 0.00

Additional Medical Expenses Tax Credit (Section 6B): R 0.00

To reduce your tax liability, it’s essential to understand how to calculate the Medical Aid Tax Credit (MTC). This rebate helps lower your taxable income if you contribute to a registered medical scheme. Using our MTC Calculator, you can easily estimate potential savings based on factors like age, dependents, and extra medical expenses.

The MTC calculation varies depending on individual factors. Our tool simplifies the process, showing how much tax relief you qualify for, whether you’re under 65, over 65, or have a disability. Try it today and see your potential savings.

Medical Tax for the 2022-2025 Year

Taxpayers can lower their monthly SARS tax bill by a fixed amount through the Medical Schemes Fees Tax Credit. For the 2022-2025 tax year, as the primary medical aid member, you are eligible for an R364 medical tax credit. Additionally, your first dependent is also eligible for an R364 credit. Moreover, each additional family member on your medical aid plan will earn you an R246 monthly tax credit.

  1. Primary Member: R364
  2. First Dependent: R364
  3. Each Additional Family Member: R246 monthly

To claim these deductions on your taxes, you will need to obtain a tax certificate from your medical aid provider. Furthermore, this medical aid is also essential for calculating any out-of-pocket medical expenses not covered by your medical aid. If your employer deducts money each month for your medical aid premiums, they can use the Medical Schemes Fees Tax Credit to lower your taxable income.

However, if you pay for medical aid from your own funds, you can claim a refund of that tax when filing your taxes. In addition, it’s important to note that this tax credit is applicable only to taxpayers who are members of a registered medical scheme in South Africa, covering eligible dependents. While calculating your medical tax credits, you can also check Income Tax Calculator to see how these credits affect your overall tax liability or use our Provident Fund Tax Calculator for retirement-related tax savings.

How to Calculate the Medical Tax Credit?

Let me explain how you can perform the calculations required to determine your eligibility for the Medical Scheme Fees Tax Credit. The steps are outlined below:

Calculation For Individuals Under 65 (Not Disabled)

The calculation for those under 65 who are not disabled involves determining additional credits for medical expenses and contributions not covered by the standard Medical Scheme Fees Tax Credit (MTC). The step-by-step explanation is given below:

  • Add up all the contributions made to a registered medical scheme throughout the tax year.
  • For individuals under 65, the MTC for the tax year is calculated using the following formula.
  • MTC = 4 x R364 + n x R246
  • Include any medical expenses that were paid out of your own funds and covered by the medical scheme.
  • Deduct 7.5% of your taxable income from the total sum. This adjustment is made to ensure that the credits are applied correctly based on your income level.
  • Calculate additional credits by subtracting four times the MTC from your total medical aid payments, adding out-of-pocket medical expenses, and then doubling the result. Finally, multiply by 25% to determine the additional tax credit.
  • Additional credits = (Medical Aid Contributions – 4 X MTC + Out-of-Pocket Medical Expenses) x 0.25

Calculation For Individuals Under 65 (With Disability)

  • Add up all the contributions made to a registered medical scheme during the tax year.
  • Determine the MTC, which is based on the number of dependents and their ages according to the government.
  • Additionally, include all the medical expenses that qualify for tax relief under South African tax law.
  • Calculate the tax credit by adding the excess of total medical scheme contributions over three times the medical scheme fee credits, plus 33.3% of all eligible medical expenses paid by the individual.
  • Tax Credit = (Medical Scheme Contributions -3 x MTC) + 0.333 x Qualified Medical Expenses

Calculation For Individuals Over 65 (With or Without Disability)

  • Include all medical expenses that qualify for tax relief under South African tax law.
  • Total contributions made to a registered medical scheme during the tax year.
  • Additionally, determine the MTC applicable for the tax year.
  • Calculate the tax credit by adding 33.3% of eligible medical expenses to the excess of medical scheme payments over three times the medical scheme fee credits.
  • Tax Credit = 0.333 x Eligible Medical Expenses + (Medical Scheme Payments -3 x MTC)

Claiming the Medical Schemes Fees Tax Credit reduces taxable income for South African taxpayers who contribute to a recognized medical scheme. Therefore, understanding how to calculate and claim this credit helps lower tax payments