|Joannes Willem Jozef Maria POOT says:|
28 February 2012 at 10:07
I do not understand your example! Your are speaking about a cost of R 4000 in medication and in your new system you only deduct R 1800... where is the difference coming from? What do you mean with TAX CREDITS? How are they calculated?
28 February 2012 at 13:38
Thank you very much for your comment/question.
SARS are allowing a credit of R230 per month for the first 2 members and thereafter R154 per month for any further dependents. So once you have calculated your taxable income you would then be allowed these amounts as a tax credit, so a reduction in your tax liability. The example uses made up numbers. Under the old system you would be able to deduct the R4 000 (subject to certain rules) and then get a tax relief based on the percentage tax you paid. The new system allows for one amount no matter what percentage of tax you pay.
I hope this helps?
|Carmen Stroiz says:|
29 February 2012 at 11:45
HOW DOES THE CLAIMS FOR DISABILITY ON MEDICAL WORK ON YOUR RETURN, WE PAY OUT OF OUR POCKET FOR NAPPIES AND CERTAIN GENERIC MEDICALTION THAT DOES NOT GO THROUGH THE MEDICAL AID - DO WE STILL SHOW THE FIGURE ON OUR RETURN UNDER MEDICAL AID EXPENSES FOR A DISABLED CHILD?
29 February 2012 at 12:55
Thank you for your question, always happy to help.
If there is a family member who meets the definition of a disabled child then all the related medical expenses, paid out of your pocket and not reimbursed by medical aid can all be claimed as a deduction for the 2012 tax year. When you submit your return these amounts will be included in the, "State any disability expenses not recovered from your medical scheme" box.
I hope this answers your question? Feel free to follow up if there is anything else.
29 February 2012 at 13:27
I am single with no children earning a salary of around R10 000 and pay R1 800 medical aid. How does this "medical aid credit" affect/ benefit me. thank you.
29 February 2012 at 14:14
Thank you for the contribution.
The R1800 is that per month? If this is the case then you will receive a tax credit of R230 per month which will be taken off your calculated tax liability. However there is some good news. After you have calculated your taxable income before medical deduction (in your case - R10 000) you can multiply by *7.5% which is = R750. The R1 800 less the R920 (new laws of excess of 4x allowable tax credits) = R880 -R750 = R130 per month can then be deducted each month as well, meaning your monthly taxable income would be (R10 000 - R130)
Rough figures of course, with a series of assumptions, but i hope that helps at least.
1 March 2012 at 12:16
I have just started paying medical aid for myself and two dependants. The total for the 2 dependants per month is R1110 and my main member contribution is R918. My salary is R9900 per month. Would I qualify for tax credits. If yes, could you give me a rough idea as to what those credits would be?
Would I have to earn R10 000 or more to be able to qualify for tax credits?
|Silvana De Mattia says:|
1 March 2012 at 15:15
I am 60 years old, retired, and receive my income from investments. I pay medical contributions for myself and my son who is still studying. Does the R230 pm month apply to me or are any consessions made for retirees? This has a huge impact on my tax refund at the end of the year
1 March 2012 at 15:16
Thank you very much for your great question.
Luckily there is no minimum level of income that you need to earn in order to take advantage of the medical tax credit system. If of course you earn less than R63 556, the level of income at which you start paying tax, then it wouldn't really matter.
So using your situation where you earn R9 900 per month and based on the number of medical aid members you have you will be allowed a credit of the following:
R230 per month - for yourself
R230 per month -for your first dependent
R154 per month - for your second dependent
Total: R614 per month - for all three of you
Your medical expenditure is R1 110 + R918 = R2 028 so unfortunately you would not qualify to deduct any other amounts.
On your level of income and after your tax credits you will be paying tax of R2 576 for the 2012/2013 tax year (your employer will probably deduct more and you will claim a refund at year end).
I've made some assumptions here, so these amounts are based on the information you have provided.
I hope this helps and please keep the questions coming!
1 March 2012 at 15:29
Unfortunately the requirement for retirees is that they be 65 years or older. If you were over 65 then all amounts paid could have been claimed, but for this purpose tax law defines retirement age at 65.
You will be able to claim the R230 for both you and your son, so R460 per month. Depending on how much your taxable income and medical expenditure are there may be some medical deductions allowed if your contributions are in excess of R460 x 4 and this is then greater than 7.5% of your taxable income. There may be other factors as well given your type of income, assuming they are only dividends and interests.
Sorry i could not provide better news.
2 March 2012 at 12:55
I earn R12000.00 per month.. My medical aid is R1125.00, the company has been paying R720.00 towards my medical aid (as per capped amount)... i have been paying the difference of R405.00... does this mean the company is not going to contribute towards my medical aid as there is no capped amount??
how is the tax credit going to work, I really dont understand it...
2 March 2012 at 16:27
The new medical tax credit system won't necessarily mean that your employer is not going to pay towards your medical aid contributions. From 1 March 2012, they will factor this into the account. Remember that the more of the contribution they pay, the more likelihood you will be taxed as a Fringe Benefit (Look out for a future blog post on Fringe Benefits). Your employer will structure their payment in such a way that you won't lose out.
The tax credit will be an amount that is taken off after you have calculated your tax liability. So if you owe R15 000 in tax payable then you may have a credit of R230 x 12 if you are the only member of the medical scheme. This is different to how it was calculated before as you would first deduct the capped amount and then calculate your taxable income and therefore tax payable.
I hope this helps?
5 March 2012 at 15:01
If the medical aid contributions are paid privately, and not by the company, does it still qualify for the medical aid tax credit? My daugther earns R10K and pays for her own medical aid approx R1330.00 per month.
6 March 2012 at 12:20
Thank you for your question.
Regardless of who pays for the medical aid, a credit will still be allowed. Your daughter will be allowed R230 per month as a tax credit. Under the new credit system she is actually better off than the old medical aid deduction system so it actually is a winner here.
7 March 2012 at 14:40
how does tax credit work if you conrtibute 50% and the company contibutes 50%
pleas explain fringe benefit tax. will we lose out. would we be able to claim any expenses over and above medical aid rates.
8 March 2012 at 15:27
Thank you for your question.
You will still be entitled to the medical credit regardless. Your final tax calculation will take it into account. A fringe benefit where your employer provides a service or pays for a benefit of the employee which the employee would otherwise pay for themselves. The employer claims a tax deduction for this payment, so SARS then taxes the employee to make that up. Essentially the employer is giving the employee something for nothing, which should form part of their salary and be taxed. Lookout for the an upcoming blog on all about Fringe Benefits
You are able to claim medical aid expenses above the medical tax credit. If the amount paid exceeds 4 times the tax credit and you have other medical expenses which you did not get refunded for, then you must add all this together. Then take your taxable income and x by 7.5%. The medical amount greater than the 7.5% can be claimed as a deduction.
Medical Credit = 230 x 12 = R2 760
Medical Aid Rates = R2 000 x12 = R24 000
4x medical aid credits = R2 760 x4 = R11 040
R24 000 - R11 040 = R12960
Other medical expenditure R7 040
Total medical expenditure allowed - R20 000
Taxable Income = R100 000 x 7.5% = R7 500
Therefore R20 000 -R7 500 = R12 500 can be deducted as well
I hope this helps
Remember to visit www.taxtim.com
10 March 2012 at 21:41
So you are saying that companies currently paying the med aid contribution as a fringe benefit is taxable income for the employee? Is this correct? And the employee is not entitled to claim the 'per dependent' tax credit? Correct?
So it would be to the employees advantage if their salary is restructured so that the med contribution is shown as a "deduction" - correct?
What about if say the medical aid 'deduction' (employee contribution) is shown as R700, and the med aid fringe benefit, is shown as R2000 (the company contribution)... (Total monthly med aid premium is R2700). Will the employee still be able to claim this new 2013 tax credit (per dependent) in full or will it be pro-rated to the R700 employee contribution. Or will the tax credit be not allowed altogether for the employee.
11 March 2012 at 21:07
Excellent question, the new medical aid credit regime will give rise to some restructuring, but mainly due to the change in amounts.
Currently where the employer pays for the full medical aid contribution, the amount over R720 per month is treated as a fringe benefit as you would be allowed a deduction of R720 per month under the previous regime. So if the contribution is R1 000 per month then the fringe benefit will be R280 which is taxable. So the taxpayer is in the same position as if they paid the contribution themselves and claimed the deduction.
So now whatever is considered a taxable benefit, the amount over the credit still allowed, can be considered a fringe benefit. Generally the principle has always been that if the employer pays more than two-thirds of the contribution amount then the difference between the deduction and the contribution is a fringe benefit. This rule is most likely to continue, but we await full guidance. The credit will always be available to the employee, regardless. There will never be a situation where the taxpayer is out of pocket and cannot claim the credit.
I hope this helps a bit, as with all new laws there are some things that get worked out as we go along.
Look out for continued updates on www.taxtim.com and keep the questions coming.
14 March 2012 at 10:10
What would happen in the event that a taxpayer does not have a medical aid, but pays for ALL allowable medical expenses out of pocket. Would such a taxpayer be allowed the tax credit even though they do not have a medical aid?
|Soraya Rayned says:|
15 March 2012 at 9:03
My mom is a state pensioner, and only receives 1 100 a mnth for her pension.
I am recently resigned and am self employed, but i pay my moms medical aid which is 850 per month. She is not a tax payer, she is also not egistered on my medical aid but on her own medical aid. if i add her onto my medical aid as a dependant it would cost me much more , close to 3000pm which i wont be able to afford. each month i have to pay cash for her meds which amounts to 300pm because the medical aid does not cover for her medication. is there any way i can claim for tax credits for either myself or my mom. you see although it is her medical aid registered in her name, i pay the medical aid and it comes off my account each month because she is my dependant and i need to care for her.
How can the tax credits assist me?
15 March 2012 at 9:36
The Company pays for the full medical aid contribution which amounts to R4252, there are 3 members on the medical aid. What impact will the medical aid tax credits have on the employee. I understand that the employee will be taxed on the full R4252 but what relieve does the employee get?
15 March 2012 at 11:19
Excellent question and thanks for asking it.
In the event that a taxpayer does not have any medical aid, but all expenditure is covered by themselves then unfortunately no tax credit will be allowed. HOWEVER this does not mean that you won't be able to deduct any of these expenses.
What would happen is you would calculate your taxable income. Then multiply that by 7.5% and anything over the 7.5% that was spent on medical expenditure by yourself will be allowed as a deduction.
I hope this answers your question?
15 March 2012 at 11:27
This is a common problem here in South Africa, what to do if you pay for someone's medical aid. The practice is that you can claim this benefit, if asked for documentation from SARS you will obviously have to produce the records you have mentioned above.
Your mother as a pensioner and earning a state pension with no other income will not have to register or pay any tax so she would not take advantage of the credit. HOWEVER you may claim her credit of R230 per month as part of your medical credit claim, provided you can show proof that you are funding the cost and she isn't reimbursing you.
Please continue to ask questions as and when they come up.
remember to visit www.taxtim.com
15 March 2012 at 11:30
The employee will still get the relief of the tax credits being R230 each for the first 2 members and R154 thereafter. The employee will be taxed on the R4252 because effectively it is part of his/her salary. SARS will then still allow the credit to be claimed. Most companies structure their employee's salary like this as it allows the employee to get a bit extra in their account each month and the employer gets a tax deduction.
Bottom line is, the taxpayer will never not be allowed to claim the tax credit where it is due to him!
15 March 2012 at 20:49
i am paying my medical R1552 my gross salary is R22298.75.The credit will come to my nett salary or how does it work
|Juliana Yzel says:|
15 March 2012 at 22:19
So far I think I have a pretty good understanding of the new system vs. the old. However, on 2 websites there are referrals to high income earners, who fall in tax brackets above 30%. On both sites, they mention that such high income earners will pay more tax and thus have a lower net income. I've been doing calculations and I don't see it! With the general tax relief, it still seems to me that, regardless of any tax bracket, everyone will pay less tax.
Am I missing something? When, if ever and under normal circumstances, will someone pay more tax now than in the 2012 tax year?
18 March 2012 at 19:06
Well, firstly are you paying the medical aid yourself, or is your employer paying for it? You will receive the credit at the end of your tax calculation, after calculating how much your tax payable will be. You will then take of R230 for every month you contribute to a medical aid.
18 March 2012 at 19:13
Thanks for the great question, many people are confused by this. The reason why higher income earning taxpayers are going to be paying more tax under the new medical aid tax credit regime is that the amount allowed as a credit, R230 per month is less than the R720 deduction allowed under the old system.
For example R230/R720 = 32%
Where as someone who pays tax at the marginal rate of 40% used to be able to get a deduction of R720*40% = R288 per month, they are now limited to R230 per month.
I hope that helps answer your question?
22 March 2012 at 9:15
Hi and thanks for the great website~!
I have an employee who earns R25,000 and has 4 dependents. His med scheme is R4704 of which the company pays R2,760.
Does this now mean that his taxable income will be (25,000 + 2760) and he will receive a tax credit ofR922?
26 March 2012 at 10:30
Thank you for the positive words about TaxTim! Always appreciated.
Before I answer this question, the R25 000 that is earned, is that the cost to company including the medical aid amount?
26 March 2012 at 16:05
I pay my medical aid from my own account, the company has no contribution, there is also no monthly calculation done at the moment on my salary, in the old system I would get a tax certificate back from my medical aid of which I would then give to my tax consultant, he would then do my tax return and get me a tax refund, how would this system affect me and do I have to get the rebate monthly now or can I still have it claimed at the end of the tax year.
26 March 2012 at 17:52
Thank you for the question, always welcome.
The process remains the same as before, the only difference is now instead of getting a deduction you will qualify for a tax credit. This will be done at year end as well based on R230 per month you belong to a medical aid scheme. Your tax consultant will be able to do this for you. Alternatively you can use www.taxtim.com when tax season opens in July 2012.
I hope this helps.
29 March 2012 at 14:33
I earn a gross income of R35301 per month, I pay R4212 as monthly medical aid fees. Out of this monthly fee R1750 is employers contribution and my contribution is R2462 and that equal the R4212 I mentioned above. Its myself and 3 dependents = 4 members.
Based on this cenario what will be my tax credit.
29 March 2012 at 17:43
Thank you for the question.
The tax credit will work as follows:
R230 for yourself and your first dependent and thereafter R154 for the next two dependents. So for the tax year you would be allowed a credit of R9 216.
I hope this answers the question.
|Nelly Naidoo says:|
30 March 2012 at 16:11
I have my own medical aid and my kids have their own but I paid 40% for medical aid for my 2 kids who are on my late hubby's medical aid. His company pays 60%. The R230 credit x 2 = R460, do I claim this back when I am doing my tax return.
2 April 2012 at 11:55
Is your late husband's company going to continue to pay the medical aid in the future?
What usually happens is that on assessment, when you complete your return, you will indicate the number of members that you contribute for. SARS will then calculate the deduction, in this case the credit and make the adjustment to your tax liability. Remember that for the tax returns you will be completing in July-November 2012 the old deduction system is still applicable.
2 April 2012 at 14:48
My medical aid is covered 100% by my employer. How will the new medical aid affect me? Will I be paying out more money?
2 April 2012 at 15:02
It all depends on how much your taxable income is and what the cost of the medical aid is as well? The basic principle is that you will received a R230 per month tax credit regardless of who pays the medical aid. However if the company pays for the full amount, any payment over this could be seen as a Fringe Benefit. At the end of the day, you may be paying more now, but on assessment you will get a bigger refund. If you fall into the taxable income bracket of over 30% then you will probably be paying more now than before. Remember though that thew new medical aid tax credit system only kicks in next tax season.
I hope this answers your question.
|Nelly Naidoo says:|
2 April 2012 at 15:44
Thank you for your response. Yes, company to will pay 60% until they are 21. The Tax credit will only comes into effect for 2012/2013 tax season? Are the tax form/efiling going to be amended to accomodate for Tax credit? For this year I will complete efiling as per normal.
2 April 2012 at 20:19
I earn a basic salary of R18 500. My employer contributes 50% on medical aid, how much will i pay on tax?
3 April 2012 at 10:00
The new forms have not been issued yet, but they shouldn't change much. The amounts will still be calculated as normal, but SARS will calculate the actual tax effects on their calculation assessment taking into account the new credits. For the 2011/2012 tax season which opens in July, you would complete as normal.
3 April 2012 at 10:11
Does this basic include the medical aid and how much is the full contribution?
3 April 2012 at 13:49
My basic R 18 500 does not include medical aid contribution by the company, my contribution isR758 and the company pays R758. The total i pay for the medical aid is R1516. So i need to know the my net salary
8 April 2012 at 20:40
1. If i pay my medical aid via debit order privately will i still get my R230PM X 12 at the end of the tax season i.e. July 2013?
11 April 2012 at 9:33
Thank you for the question, I think a lot of people will be wondering about this issue.
The answer and I think you will be happy to hear is yes, regardless of how the medical aid contribution is paid, you will be allowed to claim the tax credit at during the 2013 Tax season.
23 April 2012 at 9:31
If my partner and I both have taxable incomes, under the new tax system which is better, to have combined medical aid or for each of us to have our own.
I recently closed my medical aid and joined my spouse as a dependant but now, I'm questioning the merit of my move, as my medical aid amount was deducted from my spouse's net salary.
23 April 2012 at 12:36
Thank you for the question.
Under the previous medical aid tax regime it would have been better to have the medical aid paid by the person who was in a higher tax bracket. However now it makes no difference as in your case as both of you are entitled to a R240 tax credit regardless of the cost of the Medical Aid Scheme or who pays for it.
I hope this answers your question.
25 April 2012 at 12:22
A recent question was asked:
I tried to post on your thread.Unfortunately there was a problem , with the
security code for some reason
Here is my question:
"If I understand you correctly a person who pays his medical bills cash
will receive a lesser tax benefit/credit.
I earn 15 000/month .My medical bill of roughly 1500/month for a family of 3
is paid cash.
I have structured my income over a long time in such a way that I have a
handy cash reserve for medical expenses while earning interest.Can you
compare my situation to a person , in the same income bracket who has a MA
of lets say 1500/month?
Furthermore I will have to wait till the end of the tax year to claim it
back from the receiver whilst the MA person gets the credit monthly.
Why is the state discriminating against us? Is it fair according to the
You can answer on the thread
Thank you very much
25 April 2012 at 12:34
Thanks for the great question. I think a lot of people find themselves in this situation.
In most cases, from a tax perspective it is better to have a medical aid. As you said this is because the tax benefit occurs each month as opposed to occurring at year end. Unfortunately you are one of the few people who actually save in case there is a need for medical expenditure. Due to most people not doing this the government encourages people to “save” towards their medical well being by offering a tax incentive.
Let's start with your details and calculate the tax situation (As an aside, what type of investment do you put the reserve cash into?)
2013 Tax Year
R15 000 income per month (assuming after tax)
R1 500 medical expenses per month (assuming for you, your spouse/partner and child and that no one has any disabilities)
Annual Income = R180 000
Taxable Income = R180 000 (assuming no deductions)
7.5% of Taxable Income = R13 500
Therefore you will be allowed to deduct R4 500 of your medical expenditure*
Tax Payable = R21 235
*By not having a medical aid the only deduction you can claim is an amount greater than 7.5% of your taxable income which in this case amounts to R4 500
Person with a medical aid of R1 500 per month
Taxable Income = R180 000
Tax Payable before Tax Credits = R22 360
Tax Credits = (230 +230 +154) x12 = R7 368
Total Tax Payable = R14 992
As you can see there is quite a difference in the Tax Payable in the situation you don't have a medical aid. (If it helps at all, the new medical tax credit regime actually reduces the tax payable for taxpayers in your tax bracket.)
With regards to having to wait for your refund from SARS, this depends on whether or not your medical aid is paid by your employer or by you. If you pay your own medical aid then you will only receive the tax benefit at year end, like you do now. If your employer pays it then you will get more after tax pay each month with no real tax benefit at year end.
There are several reasons why it is a good idea to have a medical aid, the tax benefit only being one of them. To answer your other question about the constitutionality of this, tax is supposed to be equitable, but this isn't always the case. The taxpayer has the choice to as to how they want to structure their affairs so the argument could be made, choose what suits you the best?
26 April 2012 at 7:34
If an employee does not pay paye. Does the tax credit apply?
26 April 2012 at 9:20
Regardless of the employment status of the Taxpayer, he/she will still be entitled to the tax credit on the tax he/she owes. So to answer your question, no it won't matter if the taxpayer does not pay PAYE.
3 May 2012 at 14:48
I need to know how much my net salary is : i earn a basic salary of R18 500. The company pays R820 towards medical aid over and above the R18 500. I pay R820 towards my medical aid. Meaning the company pay 50% contribution towards medical aid.
11 May 2012 at 10:57
My wife earns R11800 and pays R2836 to the medical aid. Her company does not have a medical aid and she pays out of her own pocket. Firstly how does the new tax credit affect us and secondly when does the tax credit come into effect?
12 May 2012 at 8:51
Thanks for the question.
Firstly, the new Medical Aid Tax Credit system comes into affect for the 2013 tax year, so effectively only for next year's submission.
In your wife's case she will be allowed a tax credit per month of R254 for herself and if you are a dependent as well then another R254 per month. This will only be taken into account at the end of the tax year so unfortunately the benefit is only seen then.
|Antonia Leferink says:|
16 May 2012 at 14:20
I got a question.
We got medical aid that doesn't cover/payout for a lot of treatments.
Now we had quiet some expences that we knew the medical aid wouldn't cover.
We paid them straight and didn't let the doctor send the bill first to the medical aid.
So those expences are not covered in the Tax return from the medical aid under "claims not paid"
I got all the receipts from those expences and all are done by registered doctors or medical practicioners.
Can I add those expences ontop of the one's under "claims not paid by medical aid"?
Must I full in the full amount or only the tax (14%) of that amount?
17 May 2012 at 17:00
Thank you for this question, I think it actually asks quite a few things taxpayers are confused about.
For all the qualifying medical expenditure you incurred which wasn't covered by your medical aid, this should be entered in the following box:
“State any medical expenses not recovered from your medical scheme (other than
physical impairment or disability expenses) 4020”
All these expenses will then be included in your return and SARS will calculate how much you can claim back against your tax payable.
The amounts that you put in are the totals at the bottom of each invoice you received. That tax of 14% is actually the VAT portion.
So for example if your invoice has:
Services = R100
VAT = R14
Total payable = R114
You would include the whole R114
I hope this helps answer your question, keep them coming in!
21 May 2012 at 22:59
Excellent website :-)
I earn in excess of R 1M per annum , and only have myself and my spouse on cover. Do i understand this correct that i will only receive the R 230 x 12 x 2 = R 5 520 deduction annually or R 460 monthly ?
22 May 2012 at 11:10
Thanks very much for the compliment on the website, we're glad you are happy with it and always appreciate compliments!
The R5 520 amount is correct however this won't be in the form of a tax deduction, but a credit against your tax payable at year end only. So given your income range you actually are worse off under the new system then the old one.
Thanks for the question and keep them coming.
25 May 2012 at 13:12
I forgot to mention that my daughter and I are dependants.
So will the calculation be as follows
666 *12 months = 7992
Will this be the rebate or is there another calaculation to take into consideration
27 May 2012 at 16:29
With regards the medical aid credit this is correct, at year end you will be entitled to a credit against tax payable of R666 per month for your family. You can always keep your other medical expenditure and if this amount exceeds 7.5% of your taxable income then that exceeded portion will be allowable as a deduction as well.
Remember this is only for the tax year ending 28 February 2013.
28 May 2012 at 10:34
I have Power of Attorney to manage my mom's finances - she receives a private pension of about R4200 (gross) per month and is 81 years old. She does not currently file a tax return. Through the pension fund, there is a medical aid benefit paid 50/50.
I have just received her medical aid tax certificate and claims not covered by scheme amounted to R12 410 (this has almost depleted what little savings she has). Can I register her as a tax payer and claim this back? Would she be able to benefit from the new medical aid tax regime? If so, can I register on her behalf as I have the POA?
30 May 2012 at 11:03
Hope you can help.
My mom and dad are pensioners and their combined annual income is approximately R36 000. They have a medical aid where they pay R1400 per month, I have just received their tax certificate from Discovery and there is R23 000 that Discovery did not pay of their medical expenses (my dad has cancer).
My question is, would they be able to claim anything back from SARS/
3 June 2012 at 17:58
Under the old system (2011) i have paid R12025 for medical aid for 9months only till 28Feb 2012. How much of a tax deduction can i claim back from this? Bearing in mind i paid this via debit order. im not sure about how the old system works.
My package for that financial year was R115k pa and bonus of R7K - total R122000
thanks Tim - Great site
4 June 2012 at 11:26
Unfortunately registering your mom as a taxpayer will not make a difference as she does not earn enough to pay tax. Therefore any deduction she would have been allowed based on her medical aid contributions and other expenses won't be taken into account.
I wish I had a better answer for you.
4 June 2012 at 11:37
Firstly I'm very sorry to hear about your dad. Unfortunately though as your parents both earn under the taxable threshold you would not be able to claim any medical expenses as a deduction because there is no taxable amount to claim it back against.
I wish I had a better answer for you.
4 June 2012 at 11:55
Assuming your medical aid contribution was R12025/9 = R1336 per month and that you paid this out of your own pocket and not via your boss.
You would be able to claim R720 per month for 9 months which is R6480. You would also be able to then claim any amount over 7.5% of taxable income as medical expenditure. However you would not qualify in this instance unfortunately.
Given your tax rate of 18%, you will be entitled to a refund of R1231.
This is only a rough estimate based on the information provided, but should be close to the actual amount.
I hope this helps.
|Jackie Aspeling says:|
11 June 2012 at 12:13
I have no dependants and my medical aid per month is R560.00 (private medical aid) will I qualify for a tax credit
|Patrick Mathibela says:|
11 June 2012 at 14:21
I am earning R26,500-00 a month and contribute R1,312-00 towards medical aid as a fringe benefit. Can you tell me what is my taxable income and how much will my tax liability be in this instance. The company pays for the medical aid, which means that i earn R27,812-00 a month.
11 June 2012 at 15:55
I currently earn about R13800 p.m (ctc), i pay a company provident fund which totals R2000 p.m (my portion is taxed), i have my own medical aid but my company contributes R585 which is shown as additional income and i am taxed on it, please explain how the "tax credit" would affect me as i dont get it back into my salary as all other employees do........
11 June 2012 at 22:17
You will receive a tax credit of R230 per month for every month you have contributed to a medical aid regardless of whether it was paid by you privately or through work. However you will only see this at the end of the 2013 tax year.
11 June 2012 at 22:27
Before i answer the question, which tax year are your referring to?
11 June 2012 at 22:29
The tax credit affects you in exactly the same way, the only difference is that because your company pays a portion of your medical aid, you get taxed on a certain portion. However at the end of the year regardless, you will be entitled to a R230 tax per month. Remember though that the tax credit only begins in the 2013 tax year.
I hope this helps?
19 June 2012 at 8:57
Lets say someone is paying there long term partner cash every month to be on the partners medical aid, could one claim that on one's own tax as a deduction?
19 June 2012 at 10:54
I pay my own medical aid of R5,099.00 per month.
I am an independent contractor (3616 - on my IRP5). It is me, my wife and 3 children on medical aid. I have a disability.
How much "Tax Credits" will I get under the new system?
19 June 2012 at 16:10
In theory yes you can claim this amount. However if the person paying the medical aid is at a higher tax bracket than you, it makes more sense for them to claim the deduction. In this way they get a bigger refund.
SARS doesn't mind who claims the deduction, but as long as only one person does so.
19 June 2012 at 16:16
For the next tax year if you have a disability then you may claim all your medical expenditure as a deduction. Your wife and 3 children, however will only be entitled to a claim of R230 per month for your wife and R154 for each child per month. So you need to look at your Medical Aid Tax Certificate and separate the amounts out.
I hope this helps.
25 June 2012 at 17:23
if i am a taxpayer with a spouse and 4 dependends , and my total contribution is 34800,
my employer contributes 15400 , and my taxable income before the medical deductions are 165879, how much in toital will i get as medical deductions in terms of the new provision of 2013?
26 June 2012 at 11:15
Thanks for the question!
For the 2013 season your tax credits will be R230 per month for you and your spouse and then R154 per month for your 4 dependents. So in total R12 912 would be available as a medical tax credit. As the law stands you would be allowed to deduct a further amount which is greater than 4x your allowable tax credits which exceed 7.5% of your taxable income. Unfortunately you don't exceed that. So you will be limited to the credit of R12 912.
I hope this answers your question?
27 June 2012 at 9:16
If the taxpayer pays his medical aid contribution privately (not through the company): Is the company compelled by law to take this into consideration when processing the monthly payroll?
27 June 2012 at 15:09
That's actually a very good question.
The problem the company faces in a situation like that is that they would not be able to claim the amount you pay for medical aid as a tax deduction as it is not part of their expenditure. They would probably also not be able to adjust their payroll system for one staff member. From a numbers point of view by having the payment on your payslip it would affect your nett-salary so they are very hesitant to do so, if they aren't paying it. As far as I am aware there is no specific law compelling your employer to do this.
May I ask why you would like them to do so? The cash difference in your bank at month end won't be a very big amount.
28 June 2012 at 14:25
the new provision thereof still entitles you to claim the full contribution( yours and the employer) , if it exceeds 4 times the tax credits and also exceeds 7.5% of the total bfore the medical aid deductions?
as this credits will be deducted from the taxable income after the tax rate ( maybe 40%) have been deducted, then will the taxable income which has to b multiplied by 7.5% not reduced by the tax credits before calculating the excess of the contributions which could be claimed?
29 June 2012 at 11:26
Taxable income is the amount that tax payable is calculated on, so therefore the tax credits will get taken off once the calculation is done. The extra amount you are allowed to deduct is before the tax credits get taken off. For a complete explanation see my blog post
I hope this answers the question?
30 June 2012 at 9:38
So glad I found you, Tax Tim :)
Our medical aid savings usually runs out half way though the year, forcing us to pay cash for the rest of our medical expenses, until the new year kicks in. The medical aid tax certificate shows the amounts claimed and not covered by the medical aid, but it obviously does not include our additional cash payments for the rest of the year, since these are not submitted to the medical aid. In the past, we would claim all the extra medical bills not included in the tax certificate, and we would receive a rather substantial tax refund. It made us feel better knowing that if the medical aid didn't cover all our expenses, we would at least be able to claim back from the tax man. So does this mean we can no longer claim medical bills once our medical aid savings has been used up that we've had to pay cash for?
30 June 2012 at 13:09
Thank you for the compliment and welcome to the TaxTim family!
Your question is an important one and will affect a lot of people. For the tax season that opens tomorrow and I hope you will be using TaxTim to help complete your 2012 income tax return, you will submit your medical expenses as always.
Going forward for the 2013 tax year and onwards, SARS will allow you to claim some of these extra expenditures as long as they combined with any amount over 4x the actual tax credit exceeds 7.5% of taxable income. I know that sounds complicated and typical tax jargon, but essentially it is the same as always, just with the added benefits of the tax credit.
So you will still be able to claim all those medical expenditures that your medical scheme does not cover and all of the out of pocket medical costs too. Unfortunately you may get a smaller deduction in the end, but that is part of SARS' attempt to even out the system.
I hope I've helped answer your question.
|mohammed abdulla says:|
1 July 2012 at 6:35
I am on my wife's medical aid and contribute towards her medical aid payments every month. She is under the tax bracket and does not complete a return, can i claim for my portion of her medical aid contributions and if so how can i make the claim
2 July 2012 at 13:36
You will be able to claim your portion of the amount paid, just as long as only one of you claim. If asked for your tax certificate by SARS, you will show them your wife's and explain the matter. If her employer pays for this however then you will not be able to claim as her nett salary already takes the contribution into account.
2 July 2012 at 17:01
I hope you are well. I am currently unemployed and did not receive any income during the past financial year. My medical expenses are 1,242 per month plus an additional 3,600 (out of pocket). I also paid a total amount of 780 for annuities.
Is it possible to claim any tax back from these amounts?
Thank you again for your advice.
2 July 2012 at 21:08
Hi there Bobby,
You will be able to claim the medical expenses and the retirement annuity contribution, however you will not get a refund, but will carry this claim over to the next tax year to be set-off against any tax you owe that year. So it is definitely worth submitting your return despite, unfortunately being unemployed.
I hope this helps,
3 July 2012 at 11:09
I would like to know if I can claim for my expenses on my husbands medical aid as well as on mine when I do my return? He is a foreign national and is unemployed, my son and him are on the same policy in his name and I am on a separate policy but pay in full for both policies. Am I allowed to claim for both policies as I pay for them both from my salary?
I hope you can help me out with this... Thanks!!!
3 July 2012 at 11:20
I have a medical insurance rather than a medical aid which is payed through my company and then I receive my tax credits. But now I called my medical insurance to find out about a tax certificate for my tax return, but they say that it's a non taxable product as it's short term insurance. So should I still be receiving the tax credits even though it's a medical insurance?
3 July 2012 at 14:06
For tax year 2013, I earn 41000 a month, my monthly medical aid contributions is 2500 for myself my wife and 3 kids. I pay this privately, it does not reflect on my payslip.
How much , if any thing, will I get back on assesment ?
3 July 2012 at 14:33
Good day, I earn R6,000 per month. I pay monthly chronic medication of R850.00. Should I do the taxreturn now on e-filling, how much do you think I will get back from SARS?
3 July 2012 at 17:21
For the 2013 year you will be entitled to a tax credit of (R230 x 2 + R154 x 3) x 12 = R11 064 This will be for all 5 of you and is based on the allowable tax credits. So at when you file these credits will be taken off what you owe in tax and should reflect as a refund on assessment.
I hope this helps!
3 July 2012 at 17:31
Thank you for the question!
Do you pay the chronic medication out of your own pocket or do you have a medical aid? If out of your own pocket i would definitely suggest completing your return.
Currently you are paying (R6 000x 12) x 18% = R12 960 - R10 755 = R2 205 in taxes. If you submit your medical claim then you should be able to get all of that back as a refund.
www.taxtim.com will guide you through the process and then even show you how to submit this via eFiling
I hope this answers your question!
3 July 2012 at 17:54
Thank you for the question!
You will be allowed to claim his policy contributions as a deduction. So you would be able to claim your medical aid deduction as per normal with you as the member. You would then claim all his contributions as other medical expenditure not reimbursed by medical aid.
I hope that makes sense? If not please feel free to let me know and I will go into greater detail.
3 July 2012 at 18:01
Thank you for a very interesting question.
Medical insurance does function differently and unfortunately does not qualify you for a tax credit. I wish I could give you better news, however you may be able to claim this as other medical expenditure not covered by medical aid. This is subject to thresholds however and you may not get the deduction. It all depends on the amount.
4 July 2012 at 12:41
Thanks for the heads up. I have been receiving the tax credits since end of April, so how will that now work in the future? Will my employer now no longer add the tax credits on to my salary?
4 July 2012 at 14:25
Thanks so much Tim, that does make sense to me.
I do have one question regarding it though, in the amount of dependants do I put 1 as I am the only one on my policy or do I put 3 (my husband, son & myself)?
Thank you so much for your help, have claimed for in previously but was never 100% certain whether I was actually allowed to, thanks for clarifying that for me.
4 July 2012 at 15:16
I have a son who is autistic he goes to a special school.he is on my husband medical aid and i have read an article here on line which says we suppose to claim for the contribition made by my husband to the medical aid , is that true.how much percentage roughly are we suppose to get from sars when claiming for the school fees, since the Occupationa Therapist and the Speech therapist claim their fees directly from the medical aid how do we claim the money back.
4 July 2012 at 18:15
Has your employer been paying for the medical insurance?
4 July 2012 at 18:23
Thank you for the question!
Your husband can claim his medical aid contributions for your family. You may need to get a doctor's letter confirming your son's autism which would then allow you to claim for disability/impairment as well. When you complete your income tax return you would show the the amount spent on medical aid and the the number of dependents. (Assuming your husband's employer does not pay for medical aid and it comes out of your pockets directly?) The school fees, provided the school is only for children with special needs may be a medical claim, please ask the school about it, they would probably need to register with some authority for this.
Any other medical expenditure, which your medical aid does not pay for and you pay out of your pocket can also be claimed as a deduction. Depending on what your income level is will determine the how much you can deduct. Always complete your return with the amount and let SARS calculate the rest for you.
If you use www.taxtim.com to complete your return, Tim guides you through the process and asks the necessary question to help complete your return properly.
I hope this answers your question?
4 July 2012 at 18:26
Great, I'm glad I could help.
If you are claiming your husband's medical aid contributions as other medical expenditure then you should only put yourself as the number of dependents, on the medical aid section, because your policy is the one that the Medical Aid deduction will be calculated on. The rest will be subject to another formula.
|Claudine Dooms says:|
5 July 2012 at 8:37
Hi Tim : please help, we are on a cash package so all our medical aid contributions are made via the employee, for yrs we have been struggling to claim tax because of this. i fully understand the 2013 tax credit but we need assistance in claiming for this year 2011-2012. how do we claim if our portion as well as the employers portion is paid via the employer. e.g. Income (3810) R2000, Deductions (4005 & 4474) R2000 we have never received a refund for this.
5 July 2012 at 9:19
Hi Tim . I am unemployed. My husband pays for my medical and kids. He is not on the medical aid. He pays it privately, its taken off via debit order every month. Can he claim the contributions? The tax certificate we get is In my name as I am the main member? And all the perscriptions he pays to and they are also in my name?
5 July 2012 at 12:37
im not on medical aid - can i claim my medical bills ?
also, my kids are on my dad's medical aid so he claims for the tax credit.
but he doesnt claim the unpaid bills of the medical aid such as dr's bills when the medical aid was finised for the year and the difference at the chemist for medicine which the medical aid doesnt pay for as i pay these 2 bills when we go. Can i claim these bills - since i paid for them ?
5 July 2012 at 17:20
Thank you for the question, I think a lot of people have this common problem.
The deduction you currently receive is taken into account when your employer is calculating your employees tax. This results in slightly less tax being paid each month than had you paid the medical aid expense directly out of your own pocket. This usually doesn't result in any refund or extra tax liability for you. If you have any other medical expenses that your medical aid doesn't cover these can be deducted however.
I hope this answers your question?
5 July 2012 at 17:24
You are most certainly able to claim all the medical bills you speak of in your question. You need to insert the total amount (including for your children) into the question which asks about amounts spent not reimbursed by medical aid. This deduction is subject to a threshold of taxable income so that will determine the actual deduction you receive. Just add it all up and put in.
6 July 2012 at 15:59
I don't have a medical aid benefit from my employer. I pay R1279.00 per month for medical aid and it is deducted through my Bank Account. I've received the tax certificate from my medical aid. I would like to know where a m I suppose to include the contributed amount, I filing though efiling.
I hope my blog will reach your attention.
6 July 2012 at 21:28
Thank you for your question!
On the first questionnaire on eFiling you need to check the box which asks have you incurred any medical expenditure. Then on the page with medical expenditure you tick the first box yes, then a popup will appear. Click NO, then enter the number of members as per your medical certificate, next to the source code 4040 enter in the medical aid contributions for the year and you are done!
I hope this helps!
8 July 2012 at 13:21
I am so glad that I found your informative blog.
I am a 66 year old pensioner (with a part-time job). My previous employer pays 100% of the medical aid contribution.
Last tax year (when I was under 65) the medical aid ‘perk' was considered a fringe benefit and added to my other income. As I turned 65 during the 2011/2012 tax year, will this year be different?
I am hoping the fringe benefit tax now falls away as I notice that this year my previous employer has not submitted the IRP5 re medical aid contributions to e-filing.
Am I being over-optimistic and does the medical aid benefit still get added to my other income even though I'm over 65?
8 July 2012 at 18:00
I am busy completing my provisional tax for 2013-01 on efiling and there is no provision made for the medical tax credit on this return form. It should be below tax payable seeing that it is offset against this ?
9 July 2012 at 11:08
Thank you very much, it works.
Enjoy your day!!!
9 July 2012 at 11:28
I'm not sure that SARS knows how they are going to adjust their forms for this yet, my best advice would be to wait until later in August to submit your IRP6 - provisional return. My feeling is they will actually leave the credit until the end of the year's ITR12, but let's wait and see. If you want to save some cash for payment in August, do the calculation without the credit and use that as a base for paying over to SARS. It's the safest.
Look out for updates on www.taxtim.com though because as soon as any changes are made, we will be sure to alert all our subscribers.
Thank you for the question!
9 July 2012 at 11:45
Thank you for this question and look out for our next Blog post which will be entirely devoted the tax benefits of being over 65 years old!
Taxpayers over 65 years of age can currently claim ALL medical aid contributions as well as all other medical expenditure your company will not cover. The fringe benefit could still come into play as by your employer paying for this, you are effectively "earning" income so any portion over your tax benefit will be seen as a Fringe Benefit. However now, it should come in as income and go straight out as a deduction potentially not causing a FB thereby having no tax consequences.
Just a quick question, has your employer not included any medical aid items on your IRP5 at all?
9 July 2012 at 13:16
Thanks so much for your help, I look forward to your blog re the kindness of SARS to the over 65's.
My previous employer has been taken over by another company in another province. Thankfully the new company has continued to pay the full medical aid contribution of their pensioners but does not send me an IRP5.
Up to now I haven't really needed the IRP5 as it has appeared regularly on the efiling page and this is the first time that it has not been visible at the start of the efiling season.
I pay in (lots of) extra PAYE to allow for the fringe benefit and I like to file my return early so that some of the voluntary additional contribution is refunded to me ASAP! From your reply to me it seems as though I should get the full amount back but I guess I can't do anything until they send the IRP5 info to SARS.