South Africa Additional Medical Credit Calculator

The second medical credit most taxpayers never claim

Almost everyone on a medical scheme knows about the main medical tax credit, the fixed monthly amount per member. Far fewer claim the second one. Section 6B of the Income Tax Act gives an additional medical expenses tax credit for two things the main credit ignores: the contributions you pay that are unusually high relative to that fixed credit, and the medical costs you pay out of your own pocket that the scheme never refunded. Day clinic shortfalls, dentistry, optometry, co-payments, and chronic medicine that ran past your savings all count. This calculator works out that extra credit using the SARS formula that matches your circumstances, because the rules differ sharply by age and disability status.

Two formulas, and the income floor that stops most claims

SARS splits taxpayers into two groups. If you are under 65 with no disability, the additional credit is 25 percent of the amount by which your qualifying expenses exceed a floor of 7.5 percent of your taxable income, where qualifying expenses are your out-of-pocket costs plus any scheme contributions above four times your main medical credit. That 7.5 percent floor is deliberately high and is the reason many healthy, higher-earning people get nothing here. If you are 65 or older, or you or a dependant has a disability recognised by SARS, the rules are far kinder: you get one third of your qualifying amount with no income floor at all, and contributions count above three times the main credit rather than four. The percentages and multiples here are the figures this calculator applies; confirm them against the current SARS guidance.

A R400,000 earner with a two-member scheme

Work through the default figures: taxable income of R400,000, total scheme contributions of R60,000, R15,000 of out-of-pocket medical costs, two members on the scheme, under 65. The main credit for two members for the year is R8,736, since the formula gives R364 a month for the member and R364 for the first dependant.

The R2,514 comes straight off your tax bill, not off your taxable income, which makes it worth more than a deduction of the same size. Watch how fragile it is: if this person earned R450,000 instead, the floor would rise to R33,750 and the qualifying amount above it would shrink, cutting the credit. The credit rewards high medical spending relative to income, which is precisely why it favours pensioners and families with real chronic costs.

Keep the proof, and do not forget disability

The credit is only as good as your records. SARS can ask for the scheme tax certificate and receipts for every out-of-pocket claim, so keep them for at least five years. A common and expensive mistake is leaving disability off the form. If you, a spouse, or a child has a disability confirmed on the SARS ITR-DD form by a registered practitioner, you move into the one third bracket with no income floor, and a wider set of expenses qualifies, including certain care and equipment costs. That single status change can turn a nil credit into a meaningful one, so it is worth checking before you assume you do not qualify.

Do over-the-counter medicines count toward the credit?

Generally only if they were prescribed and form part of qualifying medical expenses, and you have the supporting documentation. Casual pharmacy purchases without a prescription usually do not qualify. Costs your scheme paid from your savings account still count as out-of-pocket from your side for this purpose, since the money was ultimately yours.

Why is my additional credit zero when I spent a lot on medical care?

If you are under 65 without a disability, the 7.5 percent income floor is usually the culprit. On a high income that floor can be tens of thousands of rand, and only spending above it counts. The same spending on a lower income, or under the 65-plus rules with no floor, would produce a credit.