Medical Aid Tax Credits: The Discount You Might Be Missing

If you belong to a registered medical aid, SARS gives you a tax break for it — and unlike a deduction, this one is a credit, which means it comes straight off your tax, rand for rand. It's one of the few bits of the tax system that reliably puts money back in your pocket, and a surprising number of people don't realise it's being applied (or worse, that it isn't).

Here's how it works for 2026/27. The credit is a fixed monthly amount based on how many people are on your medical aid. You get R376 a month for yourself, another R376 for the first dependant, and then R254 a month for every additional dependant after that. These are flat amounts — they don't scale with how expensive your plan is, and they don't depend on your income.

A quick example. Say you're the main member, with a spouse and two children on your plan — that's four people total. The first two people are worth R376 each (R752), and the remaining two are worth R254 each (R508). Add them up and you get R1 260 a month knocked directly off your PAYE. Over a year that's R15 120 — not a trivial number.

Because it's a credit rather than a deduction, the benefit is the same whether you're in the 18% band or the 45% band. That's deliberate: it stops the tax break being worth more to high earners than to everyone else.

One thing to watch: the credit only applies to contributions to a registered medical scheme. Hospital cash plans and ordinary medical insurance that isn't a registered scheme don't qualify, even though they might feel similar. If you're not sure which you have, check whether your provider is registered with the Council for Medical Schemes.

This is general information, not tax advice. To see how your dependants change your take-home pay, use the calculator.