What is Code 4474 on a South African IRP5?
Your employer's medical scheme contribution explained — why it's not a tax credit on its own, and how it feeds the Section 6B calculation at year-end.
4474Code 4474 is the total amount your employer paid toward your medical scheme fees for the tax year. It is a reporting figure, not a tax credit — it does not reduce your PAYE by itself. Instead, SARS uses it alongside code 4005 (your own contribution) to work out whether you qualify for an additional Section 6B medical tax credit at year-end.
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What Code 4474 Means
Code 4474 records the total amount your employer paid toward your medical scheme fees during the tax year — a straightforward reporting figure SARS requires on every IRP5 where an employer contributes to an employee's medical aid. It sits alongside code 4005, which reports what you contributed yourself.
The important thing to understand about code 4474 is what it is not: it is not itself a tax credit, and for a standard employee it is not added to your taxable income. It exists mainly so SARS can calculate your total medical scheme contributions correctly — your own contribution plus your employer's — when working out whether you qualify for an additional, year-end medical tax credit under Section 6B of the Income Tax Act.
The credit that actually reduces your monthly PAYE is code 4116 — the Section 6A Medical Scheme Fees Tax Credit (R376/R376/R254 per month for 2026/2027). Code 4474 plays a supporting role in a separate, year-end calculation — it is not the credit itself.
How Code 4474 Feeds the Section 6B Calculation
Section 6B is an additional medical tax credit, calculated once a year on your ITR12 return rather than applied monthly like Section 6A. For a taxpayer under 65 with no qualifying disability, it works like this:
- Add your total medical scheme contributions for the year — your own (code 4005) plus your employer's (code 4474).
- Subtract four times your annual Section 6A credit (code 4116).
- Subtract 7.5% of your taxable income.
- If the result is positive, you receive a Section 6B credit worth 25% of that excess.
A more generous version of the formula, with no 7.5% income floor, applies if you, your spouse, or a dependant has a disability recognised by SARS, or if you are 65 or older.
Worked Example — When Section 6B Does Not Apply
An employee earns R30,000/month (R360,000/year) and covers themselves plus 1 dependant. Their medical scheme contribution is split evenly: R1,750/month from the employee (code 4005) and R1,750/month from the employer (code 4474).
| Item | Amount |
|---|---|
| Annual contributions (4005 + 4474) | R42,000 |
| 4 × annual Section 6A credit (4 × R9,024) | −R36,096 |
| 7.5% of taxable income (7.5% × R360,000) | −R27,000 |
| Result | −R21,096 (no Section 6B credit) |
This is the typical outcome for most working-age taxpayers on an average salary — the 7.5% income floor absorbs the contributions before any excess is left for a Section 6B credit. This matches the pattern already covered on the code 4116 guide.
Worked Example — When Section 6B Does Apply
A taxpayer earning R150,000/year covers a larger family with a combined medical scheme contribution (employee + employer) of R80,000/year, and claims the Section 6A credit for a main member plus 2 dependants (R1,006/month, R12,072/year).
| Item | Amount |
|---|---|
| Annual contributions (4005 + 4474) | R80,000 |
| 4 × annual Section 6A credit (4 × R12,072) | −R48,288 |
| 7.5% of taxable income (7.5% × R150,000) | −R11,250 |
| Excess | R20,462 |
| Section 6B credit (25% of excess) | R5,115.50 |
Here, high contributions relative to income push the result above the 7.5% floor, generating a real Section 6B credit — applied when the return is assessed, not shown as a code on the IRP5 itself. Use our Medical Aid Tax Credit Calculator to work out your own Section 6A and 6B position.
Is Code 4474 Taxable?
For most standard employees, no. The amount your employer contributes toward your medical scheme, reported under code 4474, is not added to your taxable income. A taxable fringe benefit for an employer's medical aid contribution does exist, but it is reported under a different code — code 3810 — and only applies to specific categories of person under SARS's classification system (independent contractors, certain directors and a small number of other categories). If you are a standard salaried employee, code 4474 on your IRP5 is informational and does not increase what you owe SARS.
Frequently Asked Questions
What does code 4474 mean on my IRP5?
Code 4474 is the total amount your employer paid toward your medical scheme fees during the tax year. It is a reporting figure required by SARS — it shows what your employer contributed on your behalf, separate from your own contribution under code 4005.
Does code 4474 reduce my PAYE?
Not directly. Code 4474 itself is not a tax credit and does not appear as a deduction from your PAYE. The actual monthly credit that reduces your PAYE is code 4116 (the Section 6A Medical Scheme Fees Tax Credit). Code 4474 instead feeds into a separate, year-end calculation for the Section 6B additional credit.
Do I pay tax on the amount shown under code 4474?
For most employees, no — the employer's medical scheme contribution reported under code 4474 is not added to your taxable income. A taxable fringe benefit for an employer's medical aid contribution only applies in narrower circumstances covered under code 3810, which is limited to specific categories of employee (SARS's "nature of person" codes A, B, C, M, N or R on your IRP5). For a standard employee, code 4474 is informational only.
How does code 4474 affect the Section 6B additional medical tax credit?
SARS adds your code 4474 (employer contribution) to your code 4005 (your own contribution) to get your total annual medical scheme contributions. That combined figure is compared against four times your annual Section 6A credit (code 4116) plus 7.5% of your taxable income. If your total contributions and qualifying out-of-pocket medical expenses exceed that threshold, you get an additional Section 6B credit worth 25% of the excess — calculated at year-end on your ITR12, not shown as a code on your IRP5. A more generous formula with no 7.5% income floor applies if you, your spouse, or a dependant has a disability, or you are 65 or older.
What is the difference between code 4474 and code 4116?
Code 4116 is your Section 6A tax credit — the fixed monthly amount (R376/R376/R254 for 2026/2027) actually deducted from your PAYE each month. Code 4474 is a separate reporting figure showing what your employer contributed toward your medical scheme. Code 4474 does not reduce your PAYE by itself; it is one of the inputs used, alongside code 4005, to work out whether you qualify for an additional Section 6B credit at year-end.
What is the difference between code 4474 and code 3810?
Both relate to the employer's medical aid contribution, but they apply to different situations. Code 4474 is the general reporting code most standard employees will see — it is not taxable to the employee. Code 3810 is a taxable fringe benefit that only applies to specific categories of person under SARS's classification (nature of person codes A, B, C, M, N or R) — for those employees, the employer's contribution is added to taxable income and taxed as a fringe benefit. If you are a standard salaried employee, code 4474 is almost always the one that applies to you, not 3810.