How do I process a Medical Tax Credit Adjustment component?
This feature is available on all PaySpace editions.
To process a Medical Tax Credit Adjustment component on an employee's Edit Payslip screen, it needs to be created on company level first.
Step 1: Create the component on company level
Navigate > Configuration > Payroll > Payroll Config > Payroll Components
Step 2: Add the component to the employee's Edit Payslip or Recurring Payroll Components screen.
Navigate > Employee > Payroll Processing > Edit Payslip > Notes
A medical tax credit is a tax rebate which is deductible from the PAYE payable by a natural person after the primary, secondary and tertiary rebates have been applied. The medical tax credit is not refundable and cannot exceed the amount of PAYE to be withheld.
An employee is entitled to a medical scheme fees tax credit in respect of medical aid contributions paid by the employee to a registered medical scheme under the Medical Scheme Act (or medical scheme registered under similar provisions contained in the laws of that country), irrespective of the employee’s age. If the employer contributes and the contribution is a taxable fringe benefit, it is deemed to be an employee contribution and a tax credit will then also be applied.
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