SimplePay has a built-in item to accommodate the special reporting and tax requirements relating to medical aid. To add medical aid to a payslip:
- Go to Employees and select the relevant employee.
- Click on Add next to Regular Inputs.
- Select Medical Aid under Deduction.
- Enter the Amount per period. This is the total of the medical aid premium, including the employer and employee’s contribution.
- Enter the amount that the employer contributes. This will result in a taxable fringe benefit for the employee.
- Indicate whether the employee handles the payment. If this option is not selected, the Nett Pay for the employee will decrease by the total medical aid premium.
- If your employee handles the payment, there will be an additional option for Don’t Apply Tax Credits. If this option is not selected, the employee should furnish the employer with proof of their medical aid contributions. This is to ensure that the reduction of the employee’s PAYE by the medical aid tax credits is only done in legitimate cases. If this checkbox is selected, the employee’s PAYE on each payslip will not be reduced by the medical aid tax credits for the period. The tax credits will then only be taken into account on assessment. This may result in the employee receiving a tax refund, provided that the correct PAYE was paid throughout the year and they do not owe income tax for any other reason e.g. additional sources of income, travel allowances.
- If the employee does not handle the payment, there will be an option for you to select the Beneficiary to which the medical aid premium should be paid. To edit the beneficiary details, go to Settings > Beneficiaries > Add (under Medical Aid).
- Enter the number of members listed on the medical aid covered by the premium. Employees are entitled to a medical aid tax credit, which will reduce an employee’s tax liability, based on the number of listed members on the medical aid.
- Click Save.
Please note: Currently, third-party payments cannot be made directly from our system; however, you can view a list of such payments to be made by going to the Pay Runs section on the left-hand menu and clicking on the PDF icon next to Beneficiaries.