Medical Aid Tax Credit South Africa 2026: How Section 6A Reduces Your PAYE

If you pay medical aid contributions in South Africa, SARS gives you a tax credit that reduces the amount of PAYE you pay each month. This is not a deduction from taxable income — it is a direct reduction of your tax bill, rand for rand. The credit is calculated under Section 6A of the Income Tax Act.

What is the Medical Aid Tax Credit (MTC)?

The Medical Tax Credit (MTC) is a fixed monthly amount that reduces your PAYE liability for every month you pay qualifying medical aid contributions. It applies to principal members, their spouses, and all dependants registered on the medical aid.

For the 2026/2027 tax year (1 March 2026 – 28 February 2027), the credit amounts set by SARS are:

Members	Monthly Credit	Annual Total
Principal member	R376	R4,512
First dependant (spouse or child)	R376	R4,512
Each additional dependant	R254	R3,048

A family of four — principal member, spouse, and two children — receives a combined monthly credit of R1,260 (R376 + R376 + R254 + R254), reducing PAYE by R1,260 every month or R15,120 over the year.

Section 6A vs Section 6B: Two Different Credits

The Income Tax Act provides two medical-aid-related tax relief mechanisms. They are often confused but work very differently.

Section 6A — The Standard Monthly Credit

This is the main credit described above. It applies to the contributions you pay to a registered medical aid scheme (not gap cover or medical insurance). It reduces your PAYE directly and is applied by your employer when calculating your monthly tax deduction.

The credit is capped at the contributions you actually pay — you cannot claim more than you pay. If your employer pays part of your medical aid as a fringe benefit, that portion forms part of your taxable income but you still earn the credit.

Section 6B — Additional Medical Expenses Credit

Section 6B provides relief for out-of-pocket medical expenses not covered by your medical aid. The credit is 25% of qualifying excess expenses — but only the amount above 7.5% of your taxable income qualifies.

Section 6B is typically claimed when you file your annual tax return — employers cannot calculate this in advance. It covers things like: co-payments at specialists, dental work not covered by your medical aid, glasses and contact lenses, and other qualifying medical expenses as defined in Section 6B(2).

Who Qualifies for the Medical Aid Tax Credit?

To claim the Section 6A credit, you must:

• Be a registered principal member of a medical aid scheme registered under the Medical Schemes Act
• Actually pay the contributions yourself, or have them deducted from your salary
• Be a South African tax resident

Who does not qualify: Persons whose medical aid contributions are fully paid by their employer with no deduction from their salary receive no Section 6A credit (the fringe benefit they receive is taxed, but the employer's direct payment does not entitle the employee to the credit). If you contribute to a hospital plan, gap cover, or private medical insurance product — rather than a registered scheme — the credit does not apply.

How the Credit Works in Practice — Worked Example

Consider a 35-year-old earning R35,000 per month gross, contributing R3,200/month to a medical aid covering herself, her husband, and one child.

Step	Calculation	Amount
Annual gross salary	R35,000 × 12	R420,000
Tax from bracket (31% tier)	R79,998 + 31% × (R420,000 − R383,100)	R91,437
Less: primary rebate		−R17,820
Tax before MTC		R73,617
Section 6A credit (3 members)	R376 + R376 + R254 = R1,006/month × 12	−R12,072
Annual PAYE payable		R61,545
Monthly PAYE	R61,545 ÷ 12	R5,129

Without the medical aid credit, she would pay R6,135/month in PAYE. The credit reduces this to R5,129 — a saving of R1,006 every month, which is exactly equal to the sum of the credits.

Does the Medical Aid Credit Affect Your RA Deduction?

No — the two work independently. Your retirement annuity or provident fund contributions reduce your taxable income first (up to the 27.5% limit), lowering the tax calculated from the brackets. The medical aid credit then reduces the resulting tax bill directly. You get the benefit of both. Using a combination of RA contributions and medical aid membership is one of the most efficient legal ways to reduce PAYE in South Africa.

See our Retirement Annuity Tax Benefit Calculator and our Provident Fund Calculator to model the combined effect.

Medical Aid Credit for Over-65s and People with Disabilities

Taxpayers aged 65 and older, and taxpayers (or their dependants) with a disability as defined in the Income Tax Act, receive an enhanced benefit under Section 6B. For these individuals, the 7.5% income threshold that normally applies to Section 6B does not apply — 33.3% of all qualifying expenses reduce their tax directly. This makes the medical benefit significantly more valuable for older and disabled taxpayers.

How to Ensure Your Employer Applies the Credit Correctly

Your employer should deduct your medical aid contributions from your salary and apply the Section 6A credit automatically when calculating your monthly PAYE. To ensure correct application:

• Provide your employer with the number of dependants registered on your medical aid
• Update this information whenever your dependant count changes (marriage, new child, child turning 26 and leaving the scheme)
• Check your payslip — the credit should appear as a reduction in "PAYE" or "income tax" deduction
• If your employer is not applying it, they are likely unaware of a change — a written notification to payroll is usually sufficient

Manually Calculating Your Medical Aid Tax Credit

Or use our Medical Aid Tax Credit Calculator to get the exact figure for your situation instantly.

Frequently Asked Questions

Frequently Asked Questions

Related Calculators

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