Medical aid tax credits in South Africa provide valuable monthly tax relief to taxpayers who contribute to registered medical schemes. For the 2026 tax year, starting 1 March 2025, each medical aid member can claim a fixed tax credit of R364 per month, helping to reduce the amount of tax owed to SARS.
Understanding the R364 Monthly Medical Tax Credit
The medical tax credit system replaced the previous medical deduction method and offers a fixed monthly rebate on your tax liability rather than on your taxable income. For the 2026 tax year, the credit amounts are R364 per month for the taxpayer (main member) and the first dependant, and R246 per month for each additional dependant on the medical scheme. This means if you are the main member with one dependant, you can claim R728 monthly, or R8,736 annually, directly reducing your tax payable by SARS. For a family of four, this amounts to R1,220 monthly or R14,640 annually in tax savings.
How the Medical Tax Credit Works in Practice
These credits are deducted from your PAYE tax monthly if your employer deducts medical aid contributions from your salary, effectively increasing your take-home pay. For example, a taxpayer earning R450,000 annually who pays R4,500 monthly for medical aid covering themselves, their spouse, and a child can claim a combined medical tax credit of R974 per month. This reduces their annual tax liability by about R11,688, easing the financial burden of medical scheme contributions.
Additional Medical Expenses Tax Credit (AMTC)
Besides the fixed monthly Medical Scheme Fees Tax Credit (MTC), there is also an Additional Medical Expenses Tax Credit (AMTC) for qualifying out-of-pocket medical expenses. For taxpayers under 65 without disabilities, SARS allows a 25% tax credit on medical expenses exceeding 7.5% of taxable income. For those over 65 or with disabilities, the credit is 33.3% on qualifying expenses. These include prescribed medicines, consultations with doctors or specialists, and other approved medical costs, but exclude over-the-counter medications. You must keep receipts to claim these expenses.
Current Developments and Future Outlook
It is important to note that the South African government has announced plans to gradually phase out medical aid tax credits to help fund the National Health Insurance (NHI) scheme. The medical tax credit system, currently valued at about R34 billion annually, is considered double funding once NHI covers health services. While no immediate changes have been implemented for the 2026 tax year, taxpayers should monitor this evolving landscape, as the tax credits may be reduced or removed in the future.
Claiming Your Medical Tax Credit
Claiming the R364 monthly credit is straightforward. If you are an employee with medical aid deductions through your employer, the credit is automatically applied to reduce your PAYE tax deductions. If you are self-employed or not taxed through PAYE, you can claim the credits when submitting your annual tax return via SARS eFiling. Ensure you accurately report your medical scheme membership and dependants to maximize your claim.
In summary, the medical aid tax credit of R364 per month for the main member and first dependant, plus R246 for additional dependants, provides predictable tax relief for South Africans with medical scheme coverage. While the system is stable for now, upcoming changes linked to the NHI could affect future claims. Staying informed and keeping medical expense records will help you make the most of these tax benefits.