[Question] Medical aid tax credit - Income tax calc 2013

[Roger15]

Hi,

Medical aid tax credit for 2013. Single employee on medical aid and no beneficiaries. Under 65.

Say the employee earns 72k a year, the employer paid R11,600 med and the employee paid R3,720 med. So total med contributions were R 15,320.

Am I correct in saying in the tax computation, R 72,000 + fringe benefit of R 11,600 = Gross income.

Then work out income tax payable on that figure, which is R 15048.00 less the rebate of R 11,040 then do I deduct the full med aid tax credit of R 2760? = R 1248 income tax payable for the year?

This is quite substantially less than 2012's comp.

Is this correct?

[AMB57]

My calculations for your employee (who I assume is paid monthly):

Employee taxable income (before med aid rebate) is 6966.67 per month (72 + 11.6 divided by 12).

PAYE on that according to the monthly tables is R248

Against this, he claims the primary medical aid rebate (code 4116) of R242

Thus you deduct an almighty R6 per month in PAYE and R139 per month in UIF (half him and half you).

This is what I would do...

[Mynhardt]

Yes your gross income would be the R72 000 + the medical aid fringe benefit of R11 600 = R83 600.

The primary rebate for the 2013 tax year is R12 080, not R11 040.

Your medical tax credit amount for the 2013 tax year is incorrect. It should be 242*12 = 2904.

Therefore your total tax payable for the year is R64, or approximately R6 PAYE per month as AMB57 calculated.

I made a simple personal income tax calculator which performs the medical aid tax credit calculation for you:
Medical tax credits calculator 2013.xlsx

[Roger15]

Thank you