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Six tax-free medical expenses you need to know about

by , 08 July 2014
There are six instances when you can pay your employees' medical benefit and SARS will deem them to have 'no value.'

'No value' means your employees don't have to pay Pay As You Earn (PAYE) on medical expenses and medical aid contributions. So, they have 'no value' for PAYE purposes and are, therefore, tax-free.

Continue reading as we take a look at the six tax-free medical expenses you need to know about so you can deal with them correctly on your payroll.

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These six medical expenses are tax-free

#1: Your company is a medical aid and you cover employees' medical expenses in terms with your company's scheme or programme.

#2: You're not a medical aid but you cover the medical expenses in terms of your company's scheme or programme and your employee isn't on a medical aid, says the Practical Tax Loose Leaf Service.

#3: You provide medical services to your employees at their place of work so they can perform their duties better.

For example, you run a mine and have onsite doctors that attend to injuries immediately. Or you're involved with a soccer team and you have a physiotherapist who's available to all team members at their home club for no charge.

#4: You're not a medical aid, you cover the medical expenses in terms of your company's scheme or programme and your employee is on a medical aid, but his medical aid refunds you.

#5: You pay the medical expenses of an employee (or his dependants after his death) who retired because of ill health or other infirmary.

#6: You pay the dependent's medical expenses if your employee dies. Note: (In this case, your employee must have been under your employ at the time of his death.)

There you have it: The six instances when you can pay your employee's medical benefit tax-free.

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