Medical Aid & Tax: How to Get More Back from SARS (2026 Guide)

Understand the SARS medical tax credits. Learn the difference between the Medical Scheme Fees Tax Credit (MTC) and the Additional Medical Expenses Tax Credit (AMTC).

If you pay for medical aid, you are entitled to a tax break. However, it's one of the most commonly misunderstood parts of the South African tax system.

The most important thing to know is that it’s a tax credit, not a deduction. This is great news.

A deduction reduces your taxable income.
A credit directly reduces the final tax you have to pay, rand-for-rand. It's a direct discount on your tax bill.

The medical claim is split into two parts: a fixed credit for your monthly contributions (MTC) and a more complex credit for your "out-of-pocket" expenses (AMTC).

Part 1: The Medical Scheme Fees Tax Credit (MTC)

This is the simple, automatic credit you get just for being an active member of a medical scheme.

For the 2026 tax year (1 March 2025 - 28 February 2026), the fixed monthly credits are:

R364 for you (the main member)
R364 for the first dependant
R246 for each additional dependant

Example:

You pay for a medical aid policy for yourself, your spouse, and your two children (a total of 4 people).

Your monthly credit is: R364 (you) + R364 (spouse) + R246 (child 1) + R246 (child 2) = R1,220 per month.
Your total annual credit is: R1,220 x 12 = R14,640.
This R14,640 will be directly subtracted from your total tax bill for the year.

Your medical aid scheme sends this information to SARS, so it's usually pre-populated on your tax return.

Part 2: The Additional Medical Expenses Tax Credit (AMTC)

This is the complicated one, but it's where you can get a lot more money back.

The AMTC is a credit for "out-of-pocket" medical expenses. These are qualifying medical expenses that your medical aid did NOT pay for. This includes things like:

Doctors' consultation fees that you paid from your own pocket.
Medicines and prescriptions from a pharmacy (that weren't covered by your savings).
Services from specialists (dentists, optometrists, physiotherapists) that you paid for yourself.

The calculation for this credit is complex and depends on your age and disability status.

Formula 1: For Taxpayers UNDER 65 (No Disability)

This formula has a high threshold, meaning you have to spend a lot to get a little back.

First, find your "excess contributions":
- Take your Total Medical Aid Contributions for the year.
- Subtract (4 x your Total MTC).
Then, calculate your total medical spend:
- Add your Excess Contributions (from Step 1).
- Add all your Out-of-Pocket Expenses.
Finally, find the credit:
- Take your Total Medical Spend (from Step 2).
- Subtract 7.5% of your Taxable Income.
- You get a credit of 25% of this final positive amount.

Simplified: For most people, you only get a credit if your total out-of-pocket costs are very high (more than 7.5% of your annual income).

Formula 2: For Taxpayers 65+ OR with a Disability

If you are 65 or older, or if you, your spouse, or your child has a qualifying disability (registered with SARS via an ITR-DD form), the formula is much more generous.

First, find your "excess contributions":
- Take your Total Medical Aid Contributions for the year.
- Subtract (3 x your Total MTC).
Then, find the credit:
- Add your Excess Contributions (from Step 1).
- Add all your Out-of-Pocket Expenses.
- You get a credit of 33.3% of this final amount.

Notice the difference? The 7.5% income threshold falls away, and the credit percentage is higher (33.3% vs. 25%). This means taxpayers over 65 or with a registered disability get a much larger and more direct benefit from their out-of-pocket costs.

What You Must Do

Keep Every Slip: Keep all invoices from doctors and all pharmacy slips for prescriptions.
Track Everything: You must add up all these qualifying costs to claim them on your ITR12.

File Your Return: Even if you earn below the threshold, you must file a return to get your medical credits back as a refund.

Disclaimer:This article is for informational purposes only and does not constitute financial or tax advice. Tax laws are complex and subject to change. We strongly recommend consulting with a registered tax practitioner to address your specific circumstances. TaxClaw.ai is a tool to assist you in managing your tax obligations and is not a substitute for professional advice.

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