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Medical calculation for source code 4008 for 2011 and 2012?

Posted 8 January 2014 under Tax Questions



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Everywhere I can find a formula on how to calculate the 2013 medical deduction code 4008, but nowhere one for 2012 and 2011. Your example for the 2013 helped a lot, thanks for that. Can you maybe also give one for the 2011/12 please.

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TaxTimTaxTim says:
9 January 2014 at 10:15

For 2011 and 2012 the system was different. You were allowed a deduction for medical aid contributions, which came off income. These amounts were R720 for the first two members in 2012 and in 2011 R670. You out of pocket medical expenses were totaled and if they exceeded 7.5% of Taxable Income, as in 2013 then that difference was allowed as a deduction. This was added to the R720 etc to give you your deduction under 4008.


Tax Apprentice says:
9 January 2014 at 10:27

Ok I am going to give you an example, can you please do it and also say where what should go on the ITR12, lets say for 2011.

On the medical certificate: the amount contribute was R74 280, and the amount pay out of pocket was R2 160.
On the IRP5 the codes was: 3810 - R38003 ; 4474 - R38003 ; 4005 - R76006.

Thank you!


TaxTimTaxTim says:
9 January 2014 at 10:32

How many members?


Tax Apprentice says:
9 January 2014 at 10:47

3 members


TaxTimTaxTim says:
10 January 2014 at 10:57

And what was the value of your taxable income before the medical deduction?


Tax Apprentice says:
10 January 2014 at 11:05

The income is R982230.


TaxTimTaxTim says:
10 January 2014 at 11:41

The deduction will be as follows:

R670 per member for the first two members per month and there after R410.

So the total of R21 000 will be deducted. Due to your very high taxable income no further deduction will be allowed as the balance of your medical aid contributions and the amount not recovered from the medical is less than 7.5% of the taxable income.

I hope that has answered your question.


Tax Apprentice says:
10 January 2014 at 11:52

Ok, well at least your answer is a deduction, mine was not! That's not the answer that eFile gives me when I put every thing in, and can you please show how you calculated your answer. The amount eFile gives me is R44 077!


Tax Apprentice says:
13 January 2014 at 9:55

Ok I figured out what I did wrong on my eFile, your answer is correct. :-)
Will you be so kind to let me know how did you calculate it exactly. Please can you provide a step by step calculation.
Thanks. Hopefully after this I will know how to do it on my own.


TaxTimTaxTim says:
13 January 2014 at 10:13

The calculation was:

Member 1 = 670 *12
Member 2 = 670 *12
Member 3 = 410 *12

Total R21 000 for the year.


Tax Apprentice says:
13 January 2014 at 10:25

I can't believe I did not see that, I thought that the R670 is already for 2 people. Thank you very much, I will use this website again. You even beat SARS on the reply. SARS still did not came back to me!! One last question, if my taxable income was less than the medical calculation would I be able to claim more?

Lets say that my 7.5% was like R20 000 and the rest of the calculation stays the same.
What will the answer be and how did you calculate it, I know you have to add the 2160 out of pocket somewhere but I don't know were???


TaxTimTaxTim says:
15 January 2014 at 10:38

You need to have a really high medical expense or low taxable income to claim the extra deduction.

So for example if your taxable income was R100 000 and your medical expenses were R15 000. Then:

7.5% x R100 000 = R7 500
R15 000 - R7 500 = R7 500 which would then be the allowable deduction over and above the contribution deduction.


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