If you contribute to a Medical Aid this tax year (i.e. 2018/2019) you will receive a fixed monthly tax credit of R310 for you as the primary member, a further R310 for your first dependent and R209 for each of your additional dependents.
SARS calls this rebate the Medical Schemes Fees Tax Credit – it is a flat rate per month (i.e. doesn’t take your taxable income into consideration) and is direct reduction of your tax liability.
For example:
If John pays for medical aid for himself, his wife and his 3 children, his tax credit for the 2019 tax year will be calculated as follows:
R310 for John
+ R310 for John’s wife
+ (R209 x 3) for his 3 children
= R1,247 tax credit per month
John’s tax liability is therefore decreased by R1,247 per month (R14,964 per year).
If your medical tax credit is greater than your actual tax liability, then your tax liability will be nil and you will not receive a tax refund. This means that in the example above, if John’s actual tax liability for the year was R13,000, it will be reduced by the tax credit of R14,964 to arrive at a nil amount due to SARS. He will NOT receive the difference of R1,964 as a tax refund.