Medical aid contributions in South Africa are not tax deductible in the old sense of reducing your taxable income, but they do lower your tax bill through a fixed monthly rebate called the Medical Scheme Fees Tax Credit. For the 2026/2027 year of assessment, the credit is R376 per month for the main member, another R376 for the first dependant, and R254 for each additional dependant.1South African Revenue Service. Medical Credits The credit comes off the tax you owe, rand-for-rand, after your liability has been worked out.
The difference matters. A deduction shrinks the income SARS taxes you on, so its value depends on your marginal rate. A credit is a flat subtraction from tax owed, so everyone gets the same benefit for the same contribution, regardless of income bracket.
How the Medical Scheme Fees Tax Credit Works
Section 6A of the Income Tax Act gives anyone who pays contributions to a registered medical scheme a monthly rebate, known as the MTC. It is subtracted directly from your calculated tax liability rather than from your income.2South African Revenue Service. Guide on the Determination of Medical Tax Credits
For the 2026/2027 tax year, running from 1 March 2026 to 28 February 2027, the monthly amounts are:
- R376 for the main member
- R376 for the first dependant
- R254 for each additional dependant
Those figures went up from R364 and R246 in the previous year.3National Treasury. Revenue Trends and Tax Proposals
Say you cover yourself, a spouse, and two children. Your monthly credit is R376 + R376 + R254 + R254 = R1,260. Over twelve months, that is R15,120 taken straight off your tax bill.1South African Revenue Service. Medical Credits
One catch: the MTC is non-refundable. If the credit is larger than your total tax for the year, you lose the excess. It cannot create a refund on its own, and it cannot be carried into the next year.1South African Revenue Service. Medical Credits This mostly affects very low earners whose tax is already small.
Which Schemes Qualify
Only contributions to a fund registered under the Medical Schemes Act generate the credit. Payments to health insurance products or unregistered hospital plans do not qualify, no matter how much they cost you. SARS verifies contributions automatically using data reported by the medical schemes themselves, so what you claim needs to match what your scheme reports.
When Your Employer Pays Part of the Contribution
If your employer covers some or all of your medical scheme contribution, that portion is a taxable fringe benefit and gets added to your income. It shows up on your IRP5 under code 3810. In exchange, the employer’s contribution is combined with yours when the MTC is worked out, so the credit is calculated on the full amount paid.4South African Revenue Service. Guide for Employers in Respect of Fringe Benefits
Employers must also apply the MTC when working out your monthly PAYE. You should see the benefit reflected in your payslip through the year rather than only at assessment time.
Extra Relief for Out-of-Pocket Medical Costs
Section 6B of the Income Tax Act adds a second credit for expenses your scheme did not cover. This is the Additional Medical Expenses Tax Credit, or AMTC. It only applies to amounts you paid out of your own pocket. Anything reimbursed by the scheme, recovered from gap cover, or paid from your medical savings account is excluded, because savings account funds belong to the scheme rather than to you.2South African Revenue Service. Guide on the Determination of Medical Tax Credits
The formula depends on your circumstances. If you are 65 or older on the last day of the tax year, or you or a dependant has a qualifying disability, the AMTC is 33.3% of the sum of your excess scheme fees (the portion above three times your annual MTC) and your qualifying out-of-pocket expenses above 7.5% of taxable income.2South African Revenue Service. Guide on the Determination of Medical Tax Credits
For everyone else, the formula is tighter: 25% of the sum of scheme fees above four times your annual MTC plus qualifying expenses above 7.5% of taxable income. Younger, healthy taxpayers with average scheme fees usually never clear the threshold, so the AMTC only starts to matter when medical costs are unusually high relative to income.
Qualifying out-of-pocket expenses include payments to registered healthcare professionals such as doctors, dentists, optometrists, physiotherapists, chiropractors, and homeopaths; hospital and nursing fees; prescribed medicines from a pharmacy; and equivalent services obtained overseas. Taxpayers claiming for a disability can also include prescribed disability expenses such as personal care attendants, prosthetics, mobility aids, service animals, home modifications, sign-language interpretation, and specialised schooling, provided the costs relate directly to the disability and are not recoverable elsewhere.2South African Revenue Service. Guide on the Determination of Medical Tax Credits
Documents to Have Ready When You File
Getting the credit right depends on having the paperwork lined up before you touch your return.
- The annual tax certificate from your medical scheme, showing total contributions and the number of dependants covered in each month. Most schemes post it to the member portal or email it out. This is what SARS matches against.
- Invoices and proof of payment for any out-of-pocket medical expenses you plan to claim for the AMTC.
- A completed ITR-DD form signed by a registered medical practitioner if you or a dependant has a qualifying disability. You keep the form rather than submitting it, but SARS can ask to see it.5South African Revenue Service. ITR-DD Confirmation of Diagnosis of Disability
- Your IRP5 or IT3(a). Employer scheme contributions appear under code 3810 as a fringe benefit and total contributions under code 4005.4South African Revenue Service. Guide for Employers in Respect of Fringe Benefits
On the return itself, enter both the total contribution amount and the correct number of dependants for each individual month. Getting the dependant count wrong is one of the most common errors, and even a single month’s mismatch changes the credit.