Medical aid fund contribution increases are applicable as from January month, and it is important that the values are correctly amended on the payroll, as the values of these contributions and tax credits are reported on the IRP5/IT3a tax certificates of the employees.
In order to process the changes, keep the following in mind:
- Make sure you receive the latest scheme contributions schedule for January from all schemes applicable to your employees.This will provide you with details which plans the employees belong to (some employees change their options at the end of the year) and the new contribution amounts
- Ensure the number of beneficiaries per month is correct as from March - this has an impact on the tax credit (take note of this if you need to make changes)
- If the employee has a "late joiner penalty", this value must be included on the contribution amount, as it forms part of the the medical aid contribution
- When changing contribution values, be sure to amend both the deduction and company contribution values (if applicable)
- Gap cover or medical insurance policiesare not medical aid funds - be sure that your contribution is processed on the correct definition line to ensure taxability and IRP5 codes are correct - the fund will be able to confirm this for you
- If you allow the employees to claim the tax credit for private medical aid contributions, be sure to receive an updated contribution certificate reflecting the new contribution amount to update the values on the payroll. Click here for more information to process a private medical aid on the payroll
- Due to the complexity of some setups, the support team will be able to assist with advice, but not assist with the implementation of the changes
If you make use of Methods of Calculation and/or the contributions form part of a Cost to Company/Package structure, or just need assistance with the changes, we highly recommend that you book your payroll consultant to assist with the changes as soon as possible. Click here to submit your booking request.