If you're a South African taxpayer contributing to a registered medical aid scheme, there's good news! SARS allows you to claim a Medical Scheme Fees Tax Credit (MTC), which directly reduces the amount of income tax you have to pay. It's not a deduction from your income, but rather a rebate subtracted from your final tax bill. Understanding how this works can put more money back in your pocket.
Let's break down what the MTC is, who qualifies, and how you can ensure you're getting the full benefit.
What Exactly is the Medical Scheme Fees Tax Credit (MTC)?
The Medical Scheme Fees Tax Credit (MTC) is a non-refundable tax credit offered by SARS to provide some relief for the cost of medical aid contributions. Think of it as a direct discount on your annual income tax.
- Fixed Rand Amounts: The MTC consists of fixed Rand amounts per month for each person covered by your medical aid contributions.
- Updated Annually: These amounts are typically reviewed and announced by the Minister of Finance during the annual Budget Speech and apply for the tax year (1 March to 28 February). For the 2025/2026 tax year, the MTC amounts are:
- R364 per month for the main member (the person paying the contributions).
- R364 per month for the first dependant.
- R246 per month for each additional dependant.
- Non-Refundable: This means the credit can reduce your tax payable to zero, but if your total MTC is more than your tax liability, you won't get the difference back as a cash refund from SARS.
Who Qualifies to Claim the MTC in South Africa?
To claim the Medical Scheme Fees Tax Credit, you generally need to meet these conditions:
- You (the taxpayer) must be the one making the contributions to the medical scheme, or they must be made on your behalf by your employer.
- The contributions must be made to a medical scheme registered under the Medical Schemes Act, 131 of 1998, in South Africa. Contributions to foreign medical schemes generally do not qualify.
- The credit applies to yourself as the main member and any dependants recognised by your medical scheme and by SARS for tax purposes.
Who is a "dependant" for MTC purposes?
According to the Income Tax Act (Section 6A), a dependant typically includes:
- Your spouse.
- Your children (including adopted children and stepchildren) who you support.
- Any other member of your family for whom you are liable for family care and support (e.g., an elderly parent living with you and dependent on you).
- Any other person recognised as a dependant by your specific medical scheme, subject to SARS's final approval.
Important: It's crucial to have your medical aid tax certificate, usually issued by your scheme around March/April each year, as it will list all the beneficiaries covered during the tax year.
How to Calculate Your Potential MTC
Calculating your total annual MTC is straightforward once you know the monthly credit amounts and how many people were covered for how long.
Here's a simple example for the current tax year:
Let's say you (main member), your spouse (first dependant), and one child (additional dependant) were covered by a registered medical scheme for the full 12 months.
- Your MTC: 12 months x R364/month = R4,368
- Spouse's MTC: 12 months x R364/month = R4,368
- Child's MTC: 12 months x R246/month = R2,952
- Total Estimated Annual MTC: R11,688
Want an easier way?
Calculating this manually can be tedious, especially if the number of dependants changes during the year.
Try the free Amicus TaxBot Medical Aid Tax Credit Estimator now
It guides you through the inputs and gives you an instant estimate.
Where Does the MTC Appear on Your Tax Return?
The MTC is automatically factored into your tax assessment by SARS if your medical scheme has correctly submitted your contribution data to them. You'll see it reflected on your Income Tax Assessment (ITA34). It's also usually pre-populated on your tax return if you use SARS eFiling.
However, it's always a good idea to: * Verify the information on your medical aid tax certificate against what SARS has pre-populated. * Understand your entitlement so you can spot any discrepancies.
Key Takeaways for Your Medical Aid Tax Credit
- The MTC is a valuable tax benefit that directly reduces your tax payable.
- Ensure you and your dependants are on a registered South African medical scheme.
- Keep your medical aid tax certificate handy when it's tax season.
- Use tools like the Amicus TaxBot MTC Estimator to understand your potential credit.
Have more questions?
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