Most South Africans who belong to a medical scheme never claim the Additional Medical Expenses Tax Credit. It's not that they don't qualify. They simply never find out whether they do.
The receipts are real, and the spending happened. They're just sitting in a shoebox, a kitchen drawer, or a folder of forwarded email invoices. Nobody's added them up.
That's the shoebox problem. SARS doesn't ask you to guess whether your medical spending crossed a threshold. It asks you to prove it, with a number. Almost nobody adds up a full year of GP visits, dentist bills, optometrist invoices, prescribed medicine and hospital shortfalls to get that number. So almost nobody knows if they've cleared the bar.
What is the 7.5% threshold?
For taxpayers under 65 who don't have a disability, and whose spouse or dependants don't either, the Additional Medical Expenses Tax Credit (AMTC) formula looks complicated on paper. It comes down to three parts:
- The part of your annual medical scheme contributions above four times your annual medical scheme fees tax credit. This is driven mainly by your contribution level, so it only moves when your premiums or the credit amounts change.
- Everything else you paid for out of pocket and never recovered from your scheme: GP and specialist fees, dentistry, prescribed medicine, hospital and theatre shortfalls, and similar qualifying costs.
- A deduction equal to 7.5% of your taxable income, subtracted from the sum of the first two. Whatever's left, you get 25% of it back as a credit. If the total doesn't clear that 7.5% line, there's nothing to claim. The credit never goes below zero.
That 7.5%-of-taxable-income line is the whole story for most under-65 taxpayers. It's also why two people with identical medical bills can land on different outcomes, depending on what they earn.
Same medical bill, three incomes
Take a household with a mid-range medical scheme contribution of R4,500 a month (R54,000 a year), covering a main member and one dependant. Say they had a big medical year: a baby, a surgery co-payment, an extended illness. It added up to R100,000 in qualifying costs paid out of pocket, none of it claimed back from the scheme.
Start with the contribution side of the formula. The annual medical scheme fees tax credit for a main member plus one dependant, for the 2026 tax year, is (R364 + R364) x 12 = R8,736. Four times that is R34,944. Subtract that from the R54,000 in contributions, and R19,056 of the contribution is "in play" for the AMTC formula.
Add the R100,000 in other qualifying expenses, and the pre-threshold total is R119,056. Now see what the 7.5% line does at three different taxable incomes.
Taxable income of R300,000
7.5% of R300,000 is R22,500. R119,056 minus R22,500 leaves R96,556. The credit is 25% of that: R24,139.
Taxable income of R600,000
7.5% of R600,000 is R45,000. R119,056 minus R45,000 leaves R74,056. The credit is 25% of that: R18,514.
Taxable income of R1,200,000
7.5% of R1,200,000 is R90,000. R119,056 minus R90,000 leaves R29,056. The credit is 25% of that: R7,264.
Same receipts, same medical scheme, three different results. The line you need to clear rises with your income. The lower earner recovers more than three times what the higher earner does, off an identical medical year. All three recover something, because R100,000 is a large amount of qualifying spend.
A real medical year vs an ordinary one
Now run the same household through an ordinary year instead. A few GP visits, a dentist appointment, new glasses, a course of prescribed medicine. A normal R18,000 in qualifying costs, with no single big event behind it.
Add that to the same R19,056 contribution excess, and the pre-threshold total is R37,056. At R300,000 taxable income, that clears the R22,500 line by R14,556, worth a R3,639 credit. Small, but real. At R600,000 and R1,200,000 taxable income, the thresholds are R45,000 and R90,000 respectively, both higher than R37,056, so the credit is zero at both.
This is why most people assume the medical tax credit isn't worth the paperwork. Ordinary, spread-out medical spending doesn't clear the bar for most middle-to-higher earners. No amount of careful reconciliation changes that arithmetic. A real medical event, the kind that generates R60,000, R100,000 or more in a single year, often does clear it, at every income level shown above. Plenty of people who've had that kind of year never go back and check.
Why does nobody add it up?
Nobody sits down mid-year and totals their medical spending against a formula. The receipts arrive from a dozen different places over twelve months: a pharmacy till slip here, a specialist invoice there, a hospital shortfall statement months after the event, a bank debit order for a top-up paid directly out of a cheque account. None of it arrives pre-summed. Your medical scheme's own tax certificate only reflects what the scheme knows about: the portion it has already told SARS about.
Everything you paid yourself and never claimed back from the scheme falls through the cracks. SARS has a specific line for it: code 4034. It's almost always the most under-claimed figure on the ITR12, because reconstructing it means gathering and reconciling a full year of scattered documents. You can't just read it off one certificate. For the mechanics of that code, SARS code 4034: what it lets you claim back walks through a real, SARS-verified case. 155 source documents across a single year reconciled into a verified R177,459.64 in additional out-of-pocket expenses that had never appeared on any medical scheme certificate.
The honest takeaway isn't that everyone qualifies. Modest, routine medical spending doesn't clear the 7.5% threshold for most middle-to-higher earners, and no amount of tidy record-keeping changes that. A real medical year often does clear it, at every income level in the examples above. The only way to know for sure is to add up the year.
How do you find out where you stand?
You don't need to do this arithmetic by hand, and you don't need to guess which documents matter. Start with our documents checklist, which covers what SARS and your medical scheme certificate require. Then run your own numbers through the free estimator at /calculator to see roughly where you land against the threshold. If you'd like to see how the full process works, from a year of scattered documents to a submission-ready pack, /how-it-works walks through it end to end.
This article is general information, not tax advice. It explains how the medical expenses tax credit threshold works. It doesn't tell you whether it applies to your specific circumstances. The rebate amounts behind these numbers, such as the R364 and R246 monthly medical scheme fees tax credits for the 2026 tax year, are reviewed by SARS each year. The 7.5% threshold and the 25% credit rate have stayed structurally stable for some time. Either way, confirm the current tax year's figures at sars.gov.za or with a registered tax practitioner before relying on any number here.
If you'd like to see roughly where your own year lands, try the free estimator at /calculator. Read /how-it-works for the full picture, from a year of documents to a verified, submission-ready pack. Or get in touch if you'd rather talk it through.