A Medical Scheme Fees Tax Credit (MTC) is a rebate which effectively reduces the normal tax a person pays. The MTC applies to fees paid by a taxpayer to a registered medical scheme for him/herself and his/her dependants.
A MTC is a fixed monthly amount which increases according to the number of dependants on the taxpayer’s medical scheme.
With effect from 1 March 2017, the following medical tax credits related to medical scheme contributions will be taken into account for tax payers. The credit must be taken into account by an employer when calculating the amount of Employees’ Tax to be deducted from the employees’ remuneration.
|Monthly medical tax credits for all tax payers|
|Member||R303 per month|
|First dependant||R303 per month|
|Additional dependants||R204 per month for each additional dependant|
|Family of four (monthly credit)||R1 014|
|Family of four (annual)||R12 168|
The overall calculation of medical tax credits can fall in one of three categories, namely for:
- People < 65 years;
- People > 65 years; and
- People who are (or has dependants that are) disabled.
Calculating medical tax credits entails complex calculations and need to be done by a tax expert.