Medical aid tax credits: the refund hiding in your payslip
SARS pays you back a fixed amount every month for being on a medical scheme. Here's how the medical scheme fees tax credit works and how to check you're getting it.
5 min read
If you're on a medical aid, SARS reduces your income tax every month. Many young professionals don't know this — and some aren't receiving it correctly.
What the credit is
The medical scheme fees tax credit (MTC) is a fixed monthly amount knocked directly off your PAYE:
| Who | Monthly credit |
|---|---|
| You (main member) | R364 |
| First dependant | R364 |
| Each additional dependant | R246 |
So a young couple with one child gets R364 + R364 + R246 = R974 off their tax every month — R11,688 a year.
Why "credit" beats "deduction"
A deduction reduces your taxable income, so its value depends on your tax bracket. A credit comes straight off the tax itself — worth exactly the same to everyone. Earning R20,000 or R80,000 a month, the MTC is identical.
How you receive it
- Medical aid via payroll: your employer applies the credit monthly, so your PAYE is already lower. Check your payslip for a line like "Medical tax credit" or a reduced PAYE amount.
- Paying your own medical aid: your employer may not know about it. You claim the credit when you file your annual tax return — and it usually produces a refund. Don't skip filing!
The extra credit most people miss
There's a second one: the additional medical expenses tax credit, for out-of-pocket medical costs and premiums above certain thresholds. For under-65s it only kicks in once expenses are quite high relative to income, but in a year with big medical bills it's worth claiming. Keep your receipts.
Check your own numbers
Enter your salary and the number of people on your medical aid in the payslip decoder — it shows exactly how much MTC you should be getting and how it changes your take-home.