Maximise your medical aid tax benefits before the new assessments begin

As South African taxpayers prepare for the upcoming 2026 tax season, it’s crucial to understand how belonging to a registered medical scheme impacts your finances. According to Medshield Medical Scheme, the contributions you make to your medical aid not only safeguard your health, but they also come with a significant built-in tax benefit. Through a structured system of tax credits, the South African Revenue Service (SARS) offers refunds on a portion of your medical scheme contributions, effectively lowering your overall tax bill. However, many taxpayers remain unaware of how to claim these benefits, or even if they qualify.

With SARS set to begin auto-assessments from July 1, and the full filing season commencing shortly after on July 13, Medshield aims to enlighten members on optimising their medical aid tax benefits.

Understanding medical aid tax benefits

Medical aid tax does not represent a discount on your medical scheme charges; instead, it constitutes a rebate from SARS for your contributions to a registered medical scheme. Each monthly contribution entitles you to a specific tax credit that reduces the tax owed, calculated based solely on the number of people covered, independent of the specific scheme or premium costs.

There are two key categories for claiming tax back from your medical aid:

• Medical Scheme Fees Tax Credit (MTC): This credit applies to all taxpayers contributing to a registered medical scheme, calculated based on the number of dependents covered.
• Additional Medical Tax Credit (AMTC): This enables taxpayers to claim credit for out-of-pocket medical expenses that your medical scheme did not cover.

The current rates for the tax year spanning March 1, 2025 to February 28, 2026 are R364 for the main member, R364 for the first dependent, and R246 for each subsequent dependent.

Do you need to claim these benefits yourself?

One area of confusion for many is the claiming process for these tax credits. The MTC is calculated and paid automatically, with employers applying it directly to monthly PAYE if contributions are deducted from payroll.

On the other hand, the AMTC involves expenses that you’ve paid out of pocket for medical services not covered by your scheme. While some medical aids may include certain information on your medical aid tax certificate, you will need to calculate and claim any other qualifying expenses yourself.

It’s important to note that gap cover and medical insurance do not qualify for the main tax rebate, as they are not underwritten by a registered medical scheme under the Medical Schemes Act. However, any additional expenses incurred from these policies may potentially count under the AMTC if they meet the stipulated requirements.

Preparing for tax season

To ensure you're primed for the tax season, consider these actionable tips:

• Review your medical expenses and medical aid contributions from March 1, 2025 to February 28, 2026 to ascertain that you’re prepared and not missing out on any eligible credits.
• Request or download your medical aid tax certificate and confirm that your beneficiary details are accurate.
• Ensure that every dependent is registered with your medical aid. Missing a dependent could mean a reduction in your tax credits.
• Maintain records of all out-of-pocket medical expenses, including invoices and receipts, ensuring that the information is correct.

By taking proactive steps now, before the rush of the filing season on July 13, you can ease the tax preparation process and safeguard your finances. A little effort now can ensure you claim every rand you’re entitled to come July.

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