With each passing year, the cost of living seems to increase exponentially, and even the basics like food, petrol and clothing are now becoming difficult to afford. South Africans especially are cutting corners wherever they can – and this may even extend to things like their medical aid.
The Council for Medical Schemes reports that as of 2022, only 14.95% of South Africans – around 8.9 million people – were covered by medical schemes. And, according to the 2022/23 Alexander Forbes’ Medical Aid Insights publication, the proportion of older members on medical schemes has increased over the last 10 years, while the number of young members has decreased.
If you’re a South African company wanting to attract top talent to your organisation, offering medical aid as part of your benefits package can therefore help you stand out from other companies vying for the same pool of top talent. But this can be expensive to do, especially if you’re growing as a company with regular new hires.
Whether it’s a full or a part subsidy, in most cases the employer will take a cost-to-company approach, meaning the contribution amount is already incorporated into the employee’s gross salary. This means that the employer pays the medical scheme directly, which gives employees a tax benefit as they’re not paying for it with their after-tax income.