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22 Aug 2011

RE: Tax benefits - a sample calculation
Person A spent R30 000 on medical expenses and earns R150 000 per year.
Person B also spent R30 000 on medical expenses and earns R150 000 per year, but Person B is handicapped.

Both pay 20% tax on their salaries (just as an example).

Person A can claim the following back:
The amount above 5% of your earnings i.e.
R30 000 - ( (R150 000 / 100) * 5)
= R22 500 (Qualifying expenses)
R22 500 * tax rate
= (R22 500 / 100) * 20
= R4500

Person B can claim the following back:
The amount above R500 of your earnings i.e.
R30 000 - R500
= R29 500 (Qualifying expenses)
R29500 * tax rate
= (R29500 /100) * 20
= R5900

Hope this helps.
Liza
Answer 463 views
Expert
CyberShrink
cybershrink

01 Jan 0001

Gosh. Very competent and helpful, thanks
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