Medical Aid fringe benefit changes

Company contributions to a medical aid for an employee below 65, is fully taxable as a fringe benefit for PAYE purposes from 1 March 2010.

SARS has simplified the process by taxing the employer contributions in full, but at the same time allowing for the deduction of the capped amount in the hands of the employee – this results in the same net tax benefit as in the prior tax year.

There is no added relief should the employee or one of his dependants be classified as a ‘person with a disability’ – this additional tax deduction is only available to the employee on assessment of his personal tax return.

In the case of employees 65 and older, there is no fringe benefit relating to the employer contribution to the medical aid.
Should you require any further information, please do not hesitate to contact us.

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