How to how to claim medical aid tax credits: South African Guide

Picture this: You’re sitting at your kitchen table in Johannesburg after a long day, staring at your medical aid statement and wondering if there’s any way to ease the burden of those monthly payments. You’re not alone. Many South Africans feel the pinch when it comes to healthcare costs, but here’s some good news — the South African tax system offers a neat little relief called medical aid tax credits that can save you some serious rands. Let me walk you through how to claim these credits in 2024, in a way that actually makes sense.

Why Medical Aid Tax Credits Matter

First off, medical aid in South Africa isn’t cheap. Whether you’re with FNB’s Discovery Health, Standard Bank’s Momentum Health, ABSA’s Fedhealth, Capitec’s KeyHealth, or Nedbank’s Multiply Health, those monthly premiums add up. The government understands this, so they give you a tax credit that reduces the amount of tax you pay, based on your medical aid contributions. Think of it as a little thank you for taking care of your health.

Unlike a tax deduction that reduces your taxable income, a tax credit directly reduces the tax you owe. This means the benefit is the same no matter your income level — whether you’re earning a bit or a lot, the credit helps lighten your tax load.

The Two Sides of Medical Aid Tax Credits

In South Africa, when you hear “medical aid tax credits,” there are actually two types to know about. The first is the Medical Scheme Fees Tax Credit (MTC), and the second is the Additional Medical Expenses Tax Credit (AMTC). Both can save you money, but they work a bit differently.

The Medical Scheme Fees Tax Credit is the easier one. For the 2024/2025 tax year, SARS allows you a fixed monthly credit of R364 for yourself (the main member) and R364 for your first dependant. For every other dependant, you get R246 per month. So, if you’re paying medical aid for yourself, your spouse, and two kids, you’d get a monthly tax credit of R364 + R364 + (2 × R246), which adds up to R1,220 each month. Over the year, that’s a tidy R14,640 knocked off your tax bill.

Here’s an example: Let’s say you’re with Discovery Health through FNB and your monthly premium is R4,500. Your MTC reduces your tax payable by R1,220 monthly. If you’re on a tax bracket where you pay 30%, that’s effectively more than R3,600 saved annually just from this credit. Not bad, right?

How to Claim the Medical Scheme Fees Tax Credit

If your medical aid premiums are paid through your employer’s payroll, you’re in luck — your employer should automatically apply the MTC to reduce your monthly PAYE tax deductions. This is standard practice at most big employers in South Africa, whether you work at a bank like Standard Bank or a company that uses payroll services linked to SARS.

But if you pay your medical aid premiums directly, say through Capitec’s debit order or Nedbank’s online banking, you’ll need to claim the credit yourself when you file your annual tax return. SARS requires a tax certificate from your medical aid, which shows the total contributions you made during the tax year. Most major schemes provide this certificate online by mid-March after the tax year ends on 28 February.

When you file your tax return via SARS eFiling, there’s a dedicated section for medical tax credits where you enter your medical aid contributions as per the certificate. SARS will then apply the correct credits to your tax calculation.

What About Additional Medical Expenses?

Now, let’s talk about those pesky medical bills that your scheme doesn’t cover. Maybe you had to pay out-of-pocket for physiotherapy sessions, special medication, or a hospital stay that exceeded your plan’s limit. Here’s where the Additional Medical Expenses Tax Credit (AMTC) comes in.

The AMTC lets you claim a portion of qualifying medical expenses that weren’t reimbursed by your medical aid. But there’s a catch — SARS only lets you claim 25% of the amount that exceeds 7.5% of your taxable income. Let me put that in context.

Imagine your taxable income is R500,000 for the year. Seven and a half percent of that is R37,500. If your qualifying additional medical expenses (after medical aid refunds) are R50,000, you can claim 25% of the R12,500 excess, which is R3,125. That amount reduces your tax payable. If you or a dependant has a disability, the rules are more generous, allowing you to claim 33.3% of qualifying expenses without the 7.5% threshold.

Qualifying expenses include payments for consultations, hospital admissions, prescribed medicines, nursing care, and even treatments abroad if similar to local services. But over-the-counter meds like cough syrup or vitamins don’t count unless prescribed by a doctor.

Getting Your Documentation in Order

Here’s a tip that saved me some headaches. Always submit your claims to your medical aid, even if you think you’ve maxed out your benefits. Why? Because those claims show up on your medical aid’s tax certificate, which SARS uses to verify your expenses. Without these records, you might miss out on claiming the AMTC.

Also, keep all your receipts, invoices, and statements for any medical expenses you want to claim. When you file your return, SARS may request proof, especially if you’re claiming significant amounts.

Using SARS eFiling and Medical Aid Tax Credits

SARS eFiling has made claiming medical tax credits much smoother than it used to be. When you log in, you’ll find your medical aid certificates already uploaded by your scheme, especially if you use larger providers like Discovery Health or Bonitas.

If you don’t see your certificate, you can upload it yourself. Then, the system automatically calculates the MTC for you. For the AMTC, you’ll need to enter your additional qualifying expenses manually, so have your records handy.

If you’re not comfortable with eFiling, a tax practitioner or accountant can help you claim these credits properly. Many South Africans use professional help to ensure they don’t miss out on these benefits.

Real-Life Example: The Mokoena Family

Let me share a story about the Mokoenas from Pretoria. Thabo and Naledi are both working professionals, with two kids and a medical aid through Momentum Health. They pay R5,000 a month in medical aid premiums, covering themselves and their children.

Every year, they get a tax certificate from Momentum Health, showing their contributions. Because they pay through payroll at Standard Bank, their employer applies the Medical Scheme Fees Tax Credit automatically. This means their monthly PAYE is lower, easing their cash flow.

Last year, Naledi had to pay out-of-pocket for some specialist visits not fully covered by Momentum. They kept all receipts and claimed the Additional Medical Expenses Tax Credit when filing their tax return. SARS refunded them a nice chunk, which they used to cover school fees and other essentials.

This is a perfect example of how knowing your rights and keeping good records can turn a stressful situation into a financial win.

What If You Don’t Have a Medical Aid?

If you’re not a member of a registered medical scheme, you won’t qualify for the Medical Scheme Fees Tax Credit. However, if you pay medical aid fees for a dependant who is a member, you can claim the credit for that dependant. For example, if you support an elderly parent on a registered scheme, you can claim the R364 monthly credit for them.

Also, without medical aid, you can still claim the Additional Medical Expenses Tax Credit for qualifying out-of-pocket expenses, subject to the income thresholds and rules.

Next Steps: How to Make This Work for You

Now that you know the basics, here’s what you can do to make sure you get your medical aid tax credits in 2024:

First, check that your medical aid is registered with the Council for Medical Schemes and that you get a tax certificate every year. Most big providers like Discovery Health, Momentum, Fedhealth, KeyHealth, and Multiply do this automatically.

If your employer doesn’t apply the MTC to your PAYE, talk to your HR or payroll department to fix this — it could mean more money in your pocket monthly.

Keep every medical receipt and claim everything you can. If your medical aid doesn’t cover certain treatments or medications, don’t forget to include those expenses in your tax return for the Additional Medical Expenses Tax Credit.

Use SARS eFiling to file your return, or get a tax expert to help. It’s worth it, especially if you have a complex medical history or multiple dependants.

Finally, if you’re with any of the major South African banks like FNB, Standard Bank, ABSA, Capitec, or Nedbank, check if they offer any tools or advice on managing your medical aid and tax credits. Some banks integrate health and financial planning, which can make managing these claims easier.

In the end, claiming your medical aid tax credits isn’t just about ticking a box. It’s about understanding the system, keeping good records, and making sure you get the relief you deserve. So, next time you’re juggling those medical bills and tax returns, remember: a little knowledge goes a long way in keeping your wallet healthy too.