The medical rebate in income tax works through two separate credits that reduce the tax you owe rand-for-rand. The first is the Medical Scheme Fees Tax Credit, a fixed monthly amount for every person on your registered medical scheme. The second is the Additional Medical Expenses Tax Credit, which covers qualifying out-of-pocket costs your scheme did not pay. Both apply after your tax is calculated, so they lower your final bill directly rather than reducing your taxable income.
The Monthly Scheme Fees Credit
For the year of assessment running from 1 March 2026 to 28 February 2027, SARS sets the Medical Scheme Fees Tax Credit at these amounts:1South African Revenue Service. Medical Credits
- Main member: R376 per month (R4,512 per year)
- First dependent: R376 per month (R4,512 per year)
- Each additional dependent: R254 per month (R3,048 per year)
A family of four with a main member, spouse, and two children receives R376 + R376 + R254 + R254 = R1,260 per month, or R15,120 for the year. That amount comes straight off the tax owed.
The credit is non-refundable. It can bring your tax liability down to zero, but SARS will not pay out any leftover amount, and you cannot carry an unused portion into the next tax year.1South African Revenue Service. Medical Credits
SARS revises the figures each year through the national budget. The amounts above replaced last year’s R364, R364, and R246, so if your payroll system or tax software is showing older numbers, it needs updating.
Who Counts as a Dependent
Because the credit scales with the number of people on your scheme, the definition of a dependent matters. It covers your spouse or partner and any child or immediate family member you are financially responsible for.2South African Revenue Service. Guide on the Determination of Medical Tax Credits
For children, age rules apply. An unmarried child under 21 qualifies automatically. The limit rises to 26 for a child enrolled full-time at an educational institution who is not yet financially independent. A child with a disability qualifies at any age.2South African Revenue Service. Guide on the Determination of Medical Tax Credits
Anyone else recognized as a dependent under your scheme’s own rules also counts, which often extends to an elderly parent or a sibling you support, provided the scheme lists them as a beneficiary and you pay their contributions.
The Additional Credit for Out-of-Pocket Expenses
The Additional Medical Expenses Tax Credit covers qualifying costs your scheme did not reimburse. How it is calculated depends on your age and whether you or a dependent has a qualifying disability.
Under 65 and No Disability
Your credit is 25 percent of a combined figure: the amount by which your total scheme contributions exceed four times your Medical Scheme Fees Tax Credit, plus qualifying out-of-pocket medical expenses, minus 7.5 percent of your taxable income.3South African Revenue Service. Guide on the Determination of Medical Scheme Fees Tax Credits and Additional Medical Expenses Tax Credits
In practice the 7.5 percent floor is high enough that many people under 65 will not benefit unless their unreimbursed spending is significant. A worked example:
- Taxable income: R350,000
- Scheme contributions for the year: R36,000
- Scheme fees credit (member plus one dependent): R9,024
- Out-of-pocket qualifying expenses: R18,000
Excess contributions = R36,000 minus (4 × R9,024) = R0. Out-of-pocket costs minus 7.5 percent of taxable income = R18,000 minus R26,250 = R0. No additional credit results. If out-of-pocket costs were R50,000, the excess over the 7.5 percent floor would be R23,750, and the credit would be 25 percent of that: R5,937.50.
65 or Older, or With a Qualifying Disability
The rules ease considerably once you turn 65, or where you or a dependent has a disability recognized by SARS. The 7.5 percent income floor falls away, and the rate rises from 25 percent to 33.3 percent.3South African Revenue Service. Guide on the Determination of Medical Scheme Fees Tax Credits and Additional Medical Expenses Tax Credits
The formula becomes 33.3 percent of two amounts added together: scheme contributions in excess of three times (not four times) your Medical Scheme Fees Tax Credit, plus all qualifying out-of-pocket medical expenses. Every rand of unreimbursed qualifying spending feeds into the credit.
What Qualifies as a Medical Expense
SARS accepts amounts paid out of pocket to registered medical professionals such as doctors, dentists, optometrists, physiotherapists, chiropractors, and homeopaths, along with fees charged by hospitals, nursing homes, and registered nurses. Prescription medicine dispensed by a pharmacist qualifies. Over-the-counter supplements and general wellness products do not.2South African Revenue Service. Guide on the Determination of Medical Tax Credits
Where you or a dependent has a disability, the list widens. It takes in the salary of a personal care attendant, transport costs to a special-needs school beyond a 10-kilometer radius, prosthetic limbs, and the insurance, maintenance, and repair of disability-related equipment.
One rule cuts across every category: you can only claim what your scheme or any other source did not reimburse. If the scheme paid part of a bill and you covered the balance, only your portion qualifies.
Records You Need to Keep
Your medical scheme issues an annual tax certificate showing contributions for the year, the number of dependents, and claims the scheme did not pay. That certificate carries most of the numbers you need. Request it from your scheme if it has not arrived by filing season.
For out-of-pocket costs, hold onto receipts from every consultation, pharmacy purchase, and hospital stay the scheme did not reimburse. Disability-related claims require a completed ITR-DD form signed by a registered medical practitioner. The form is valid for 10 years for a permanent disability, or one year if temporary.4South African Revenue Service. Tax and Disability You do not submit it with your return, but SARS can ask to see it.
SARS can request supporting documents for up to five years after you file, so keep certificates, receipts, and the ITR-DD form for at least that long.5South African Revenue Service. Record Keeping
Claiming on Your ITR12
Both credits are claimed on the ITR12 income tax return through SARS eFiling. In the return wizard, tick the option for medical scheme contributions and expenses; that opens the fields where you enter figures from the tax certificate and your receipts.6South African Revenue Service. Comprehensive Guide to the ITR12 Income Tax Return for Individuals
The source codes you will use most:
- Code 4005: Total scheme contributions paid by you or your employer
- Code 4034: Qualifying medical expenses you paid that were not claimed from your scheme
- Code 4020: Medical expenses you claimed from your scheme (from your tax certificate)
If your employer deducts scheme contributions from your salary, those amounts usually pre-populate from your IRP5. Code 4005 only needs manual entry when you pay the scheme directly from your own bank account.7South African Revenue Service. How to Complete Your Individual Income Tax Return Disability-related expenses use codes 4022 and 4023.
Check the dependent count and source codes carefully before submitting. Those are the two places a medical rebate most often goes wrong.