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Don't forget: If you pay your employee's medical bills, unless these four exceptions apply, he'll still pay tax

by , 13 August 2014
Let's assume your employee is really sick or has an injury and needs to spend a long time in hospital. Since you know what he earns, you know those medical bills are going to put him in debt for the rest of his life. So you decide to make this your good deed for the month and you pay his medical expenses as a company benefit.

While your employee now doesn't have to pay R80 000 in medical bills, he still has to pay R2 800 in tax. While that's nothing in comparison, if any of these four exceptions apply, he won't actually need to pay a tax at all...

 

There are four exceptions to the medical fringe benefit rule

 
1. If you have an employer scheme that provides your employees (or his dependants) with a list of treatments from the minimum benefits the Minister of Health determined.
 
2. If you pay for the medical treatment of an employee's dependants after he's dead. This applies if he was still your employee, or retired/resigned, on the date he died.
 
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3. The medical expenses you pay are for an employee who's older than 65.
 
4. If you provide medical services to your employees in general, at their work, so they can perform better. An example of this is to give your employees access to stress relief treatment so they can focus on work and be more productive.
 
If any of these four exceptions apply, you can pay your employee's medical bill in full and he doesn't have to pay a cent of fringe benefit tax
 
There you have it. Four exceptions to the medical fringe benefit rule that'll ensure your employee can get better without breaking the bank.
 


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