[Question] Private Medical Aid taken into account on payslip for tax credit monthly

[Christel]

Could someone please give me an indication of where I can find a document by SARS saying that it's ok for an employer to take into account an employees private medical aid contribution on his payslip so that he can get the benefit of the tax credits monthly? I work on Pastel Payroll and the code to use is 7085. My husband is employed by a labour broker who does not have a medical benefit for the employees, I have asked the Payroll manager to please include his contribution (Sizwe is a registered medical aid in SA) so that he can get the tax credit.. but they refuse. I think they don't understand that the IRP5 at the end of the day will show all income & deductions and that SARS determines tax payable/refundable on tax assessment...
This is the responce I got:
Hi Christel,
As mentioned in my previous mail, We as an employer are responsible for deducting tax based on earnings and deductions present in our payroll.
We pay over 20 00 employees a monthly basis. And will not be able to validate that the Medical aid is debited from your account monthly.
Kind Regards
Lorenda Esterhuizen
Payroll Manager SA
Capital Outsourcing Group

The main reason for my concern is that SARS has indicated that the Tax Credits will be handled the same as the Income Tax Rebates, i.e. not paying out the "credit".....

[Nickolai Naydenov]

What they told you is nonsense, they can add it ot their payroll so that your husband can have the tax benefits on a monthly basis otherwise he will claim money back once a year when he does his tax returns.

[Christel]

Thanks for your feedback Nickolai.... my only concern is that at the recent FASSET Tax Update I attended the speaker said that SARS will treat the Tax Credits the same as the Tax Rebates, i.e. not to refund them ....so we will thus loose out all the way?

[Nickolai Naydenov]

Tax credits and tax rebates ate two different things. Have a look at the link I posted in the thread with the tax calculations, the document explains everything you need to know including how it was last tax year and how it woeks with the tax credits this year

[geraldenek]

They don't need to deduct it if they prefer not to - in the end the employer is responsible for the PAYE. As the payroll manager mentioned that they can't validate that everyone pays their medical aid on a monthly basis.

If for some reason someone at the company only states they pay it over and the company deduct this for PAYE purposes and the person dissapears into thin air, the company is responsible to pay over the PAYE not paid over.

[Christel]

Hi Geraldene, Thanks for your input... I think I finally (lightbulb * * *) got to the bottom of it all (Ai, Nickolai will be glad to read this lol)... we will still get the refund of excess PAYE deducted... but people that falls into the 18% bracket might go into a credit and not be refunded as the tax credits will not be paid out to people, but in my case we don't fall into the 18% bracket so we should get a refund. Eish... better late than never...