Medical Aid Legislation for the 2013/2014Tax Year
Medical Aid Setup(Revised 4 March’13)
Quick Payroll 1.2.40
Medical Aid Legislation for the 2013/2014Tax Year.
Effective the 1st of March 2013, employees who contribute towards a medical aid or whose employers contribute on their behalf will qualify for the following monthly Tax Credits:
• R242 for the Main Member
• R242 for the First Dependant / Spouse
• R162 for Each Additional Dependant
To implement the new Medical Aid Legislation on Quick Payroll you must be running Version 1.2.40 update + Tax 2014 tables. You will have to do this update before processing your first Payroll Run for March 2013.
Version
Please ensure you are running Quick Payroll Version 1.2.40 and have applied the Tax 2014 tables.
Index
- Ensure you’ve got the right Tax tables...... p2
- Ensure you’re on the correct Version...... p2
- Setting up your Medical aid
- Employee contributes + employer contributes...... p3
- Setting up your PTT’s...... p 3
- Configuring PTT’s under Payroll Preferences...... p 4
- Setting up employees to calculate Tax Credit...... p 5
- Employee contributes full amount...... p 10
- Setting up your PTT’s...... p10
- Configuring PTT’s under Payroll Preferences...... p11
- Setting up employees to calculate Tax Credit...... p11
- Employer contributes full amount...... p 14
- Setting up your PTT’s...... p 14
- Configuring PTT’s under Payroll Preferences...... p 15
- Setting up employees to calculate Tax Credit...... p 16
- Ensure your Tax tables 2014 has been applied by going to Company> Tax tables from the menu bar.
- Ensure you’re on the correct Payroll Version.
To setup your medical aid you must be on Version 1.2.40. Go to Help > About Payroll:
Setting up your Medical Aid
3.1 Employee contributes + employer contributes.
(In this example the employee contributes R 2000 and employer contributes R2000. There are also 3 dependents + primary member)
- Setting up of Medical aid PTT (Payroll Transaction Types)
1.1Employee’s contribution- Type: Deduction (PTT203)
1.2Employer’s contribution- Type: Company Contribution (PTT 405)
1.3Medical Tax Credit- Type: Fringe Benefit (Needed to calculate Tax Credit) (PTT 101)
Note: Taxable is not ticked.
1.4Med aid Company contribution as F/B- Type Fringe Benefit (PTT 102)
Note: This PTT is needed to calculate the Taxable Income.
3.1.2 Configuring PTT’s under Payroll Preferences
> Go to Preferences> Additional Preferences.
Employee’s contribution: In the below example the employee’s contribution, PTT 203 is setup in the field ‘Employee Medical Aid PTT’s’.
Employer’s contribution: In the below example the employers contribution, PTT 405 is setup in the field ‘Employer Medical Aid PTT’s.
Click on Save to record changes made.
3.1.3 Setting up employees to calculate Tax Credit
To calculate the Tax Credit correctly you will have to specify the number of Dependants for each employee. In the below example Employee 001 has 3 dependants.
His Tax Credit will therefore be R808.00.
Note: If an employee is the primary member then the number of dependants will be zero.
‘Company pays half and employee pays half’- calculation.
SalaryR10,000.00
Medical Fringe Benefit (Company contribution)R 2000.00
Taxable EarningR 12,000.00
Normal tax (before tax credit)R 1153.53
Less Tax Credit R 808.00
Total TaxR 345.53
UIFR 100.00
Medical Aid paid by EmployeeR 2000.00
Take HomeR 7554.67
To enter the employee’s contribution edit the Med Aid PTT 203 under staff Deductions and complete the total contribution in the ‘Fixed amount to be Used’ field.
Note the calculation type is: ‘Advised Amount’
In the below example the employee is contributing R 2,000.00
PTT 203 Staff Deduction.
To enter the employer’s contribution edit the Med aid PTT 405 under Company contributions and complete the total Company contribution amount next to ‘Fixed amount to be Used’.
Note the calculation type is: ‘Advised Amount’
In the below example the employer is contributing R 2000.00
PTT 405- Company contribution.
To configure the Tax Credit PTT edit the Med aid PTT 101 under Fringe Benefits tab and setup as follow. Note the Calculation Type is ‘Medical Tax Credit’ & Taxable is NOT ticked.
PTT 101 Fringe Benefit
To configure the Company contribution as Fringe benefit to calculate the correct taxable income setup PTT 102 as follow:
3.2 Employee contributes full amount.
(In this example the employee contributes R 4000. There are also 3 dependents + primary member)
- Setting up of Medical aid PTT (Payroll Transaction Types)
1.1Employee’s contribution- Type: Deduction (PTT 203)
1.2Fringe Benefit- Type: Fringe Benefits (Needed to calculate Tax Credit) (PTT101)
Note: Taxable is not ticked
3.2.2 Configuring PTT’s under Payroll Preferences
> Go to Preferences> Additional Preferences.
Employee’s contribution: In the below example the employee’s contribution, PTT 203 is setup in both Employer + Employee Medical aid PTT’s.
Click on Save to record changes made.
3.2.3 Setting up employees to calculate Tax Credit
To calculate the Tax Credit correctly you will have to specify the number of Dependants for each employee. In the below example Employee 001 has 3 dependants.
His Tax Credit will therefore be R808.00.
Note: If an employee is the primary member then the number of dependants will be zero.
Employee pays his own Medical aid- calculation.
SalaryR10,000.00
Taxable EarningR 10,000.00
Normal tax (before tax credit)R 793.00
Less Tax Credit R 808.00
Total TaxR 0.00
UIFR 100.00
Medical Aid paid by EmployeeR 4000.00
Take HomeR 5900.00
To enter the employee’s contribution edit the Med aid PTT 203 under staff Deductions and complete the total contribution amount in the ‘Fixed amount to be Used’ field.
Note the calculation type is: ‘Advised Amount’
In the below example the employee is contributing R 4,000.00
PTT 203- Staff Deduction.
To configure the Tax Credit PTT edit the Med aid PTT 101 under Fringe Benefittab and setup as follow. Note the Calculation Type is ‘Medical Tax Credit’ and Taxable is NOT ticked.
PTT 101- Fringe Benefit
3.3Employer contributes full amount.
(In this example the employer contributes R 4000. There are also 3 dependents + primary member)
- Setting up of Medical aid PTT (Payroll Transaction Types)
1.1Employer’s contribution- Type: Company Contribution (PTT 405)
1.2Tax Credit- Type: Fringe Benefit (Needed to calculate Tax Credit) (PTT 101)
Note: Taxable is NOT ticked.
1.3Company contribution as Fringe Benefit- Type Fringe Benefit (PTT 102).
Note: This PTT is needed to calculate the taxable income correctly.
3.3.2 Configuring PTT’s under Payroll Preferences
> Go to Preferences> Additional Preferences.
Employer’s contribution: In the below example the employer’s contribution, PTT 405 is setup in the field ‘Employer Medical Aid PTT’s’.
Click on Save to record changes made.
3.3.3 Setting up employees to calculate Tax Credit
To calculate the Tax Credit correctly you will have to specify the number of Dependants for each employee. In the below example Employee 001 has 3 dependants.
His Tax Credit will therefore be R768.00.
Note: If an employee is the primary member then the number of dependants will be zero.
‘Company pays full contribution’- calculation.
SalaryR10,000.00
Medical Fringe Benefit (Company contribution)R 4000.00
Taxable EarningR 14,000.00
Normal tax (before tax credit)R 1527.33
Less Tax Credit R 808.00
Total TaxR 719.33
UIFR 100.00
Take HomeR 9180.67
To enter the employer’s full contribution edit the Med aid PTT 405 under Company contributions and complete the total Company contribution amount in the ‘Fixed amount to be Used’ field.
Note the calculation type is: ‘Advised Amount’
In the below example the employer is contributing R 4000.00
PTT 405- Company contribution.
To configure the Tax Credit PTT edit the Med aid PTT 101 under Fringe Benefits tab and setup as follow. Note the Calculation Type is ‘Medical Tax Credit’ and Taxable is NOTticked.
PTT 101- Fringe Benefit.
To configure the Company contribution as a fringe benefit edit PTT 102 as follow.
Note:PTT 102 is needed to calculate the correct taxable income.
PTT102- Company contribution as Fringe Benefit.
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