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Medical Aid and Pension contributions on IRP5



Johan says:
7 April 2022 at 12:04

I struggle to understand how the (The total deduction - code 4497 on IRP5) is calculated. I have a medical aid fund, pension fund and retirement annuity. My employer (the church) is contributing to all three of these funds. This question is for the 2021/2022 tax year with the new T-day implications. In the income section, the following IRP5 codes are used. (This I understand)
3810 - Medical aid benefit
3817 - Pension fund fringe benefit
3828 - RA fringe benefit

In the deductions/contribution section. These are the only items Payroll shows.
4001 - Pension fund employee
4005 - Medical aid contribution employee-employer
4006 - Retirement Annuity employee-employer
4474 - Medical aid contribution employer

The total (Code 4497) include code 4005 and 4474 So the medical aid contribution paid by the employer is added twice in the calculation. Is this correct?

Why are the following codes not included in the IRP5 as printed out by Payroll?
4472 - Pension fund contributions employer
4475 - Retirement Annuity employer

TaxTim TaxTim says:
7 April 2022 at 16:00

Do you contribute to a pension fund?

The total 4497 code is just the total of that section, not an indication of your actual deductions.

Johan says:
7 April 2022 at 16:12

Tim I do understand that the total is not my actual deductions.

Yes, I also contribute to the pension fund and RA and medical aid.

Is Pastell Payroll correct in not including codes 4472 and 4475 under the deductions section of the Irp5?

This total is under 4497 can then technically add some amounts twice?

TaxTim TaxTim says:
7 April 2022 at 16:15

If you personally contribute to the pension fund then there should be a source code 4001 and 4472 (assuming the employer contributes as well) and you would need to ask the employer as to why there is no 4475 - if the employer is adding a fringe benefit and taxing you on it then they should show the 4475.

For medical 4474 will always equal 3810 as the FB will equal the employer "deduction" and 4005 less the 4474 should equal your contribution so yes technically it can be added twice to 4497. You will see that you will also need to complete the medical section with the 4005 code that appears on your IRP5 (medical aid contributions) along with the code 4020 which is reflected on the medical aid tax certificate as qualifying out of pocket medical expenses.

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