The medical scheme fees tax credit, set out in Section 6A of the Income Tax Act, is a flat monthly credit against PAYE for membership of a registered medical scheme. It is a fixed rand amount per beneficiary, not a percentage.
What it means
The credit recognises medical aid membership directly in the monthly tax. For the current tax year it is R364 for the main member, R364 for the first dependant, and R246 for each additional dependant. These amounts are subtracted from the PAYE calculated, reducing the tax withheld for an employee on a medical scheme.
Where it fits in
In the PAYE calculation the credit comes off after the tax tables and rebates, the same place as other credits. It applies where the employee or employer pays the medical aid, and it feeds together with the additional medical expenses tax credit (Section 6B) into an employee's overall medical relief.
Key rules
- A fixed monthly PAYE credit per medical scheme beneficiary.
- R364 for the main member and first dependant, R246 for each further dependant.
- Set out in Section 6A and applied after the tables and rebates.
- Distinct from the Section 6B additional medical expenses credit.
