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Can employer deduct medical tax credits from employees tax but the employee is paying the medical ai

Posted 30 November 2015 under Tax Questions



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Angel says:
30 November 2015 at 13:22

Employer pays a basic salary to employee of R28 000,00 per month. There is no fringe benefits. Employee pays a medical aid scheme for himself his wife and 4 children. Employee shows proof of his medical aid to employer. Can employer deduct the medical tax credit of R1264 from the monthly employees tax. That is R5171 less 1264 =R3907. And then when doing the employers recon the IRP5 will only have the earnings of R336000,00 (under the 3601) and employees tax R46884 and no other codes except for uif. Is that correct. (tax year mar1015 to feb 2016)

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TaxTimTaxTim says:
30 November 2015 at 22:14

Usually when the employee pays his own medical aid, the medical tax credit is calculated annually when the tax return is submitted rather than it being a monthly deduction from PAYE. Therefore the timing of the tax credit would differ.
The end result would be the same though.


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