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Employers medical aid contibution for over 65's

Posted 7 August 2013 under Tax Questions



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Hi

How does an employer handle:-

1. Employers medical aid contribution made for an employee over 65? It is no longer a fringe benefit.
2. Employer pays both employer and employee contribution with no deduction from employee.

Many thanks.

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TaxTimTaxTim says:
7 August 2013 at 18:41

The full amount is taken off gross income and as it is allowed as a tax deduction and not a medical credit and therefore reduces the taxable income before PAYE is calculated.


Teecee says:
8 August 2013 at 11:45

In both cases? What I want to clarify is if the employer pays both employer and employee contributions the whole amount is deducted from employees taxable income.

What SARS CODE is used?

Many thanks


TaxTimTaxTim says:
8 August 2013 at 16:21

For employees under 65 years there is a fringe benefit so source codes 3810 would be used under income for the employer portion and source code 4005 for the actual deduction which is taken off the account, so the whole amount and then 4474 for the employer's contribution.

Of over 65's there is only source code 4005.


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