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Medical aid codes

Posted 21 November 2012 under Tax Questions

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In my IRP5, under deductions/contributions, the following appears:

code 4005: R18 324
code 4474: R11 927

But after using the SARS calculator, under amounts assessed in the SARS calculations:
Code 3810 Medical aid contributions paid on behalf of employee: R11 927

Under tax calculator, deductions section:
Code 4008: Medical expenses (Total) R8640

Is this right? The amount of R18 324 does not reflect in the tax calculator's results.

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TaxTimTaxTim says:
21 November 2012 at 11:54

The way the IRP5 is worded is for SARS to determine how much you the taxpayer and your employer each contribute to medical aid.

So the code 3810 means that for whatever portion your employer pays, you will be taxed on that regardless of who pays. That is seen as an income. Code 4005 is the actual amount that will get paid to the medical aid and is taken off your salary. Code 4474 is just a code for employer deductions, but isn't really important from your calculation.

Regardless of how much the contribution is you will only be allowed a deduction for medical aid contributions limited to R720 per month for yourself and your first dependent and then R440 per month for any further dependents.

So based on your amount under code 4008 you are the only dependent which is 720x12 = R8 640.

I hope that makes sense?

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