How to process Medical Aid contributions on Pastel Partner Payroll 2013 Update 1

Download our guide on processing medical aid contributions on Pastel Partner Payroll 2013 Update 1. We also discuss the difference between the processing methods for 2011/2012 legislation vs the new 2012/2013 legislation effective 01 March 2012.

Pastel Partner Payroll 2013 Update 1 – New Medical Aid Legislation

28 Comments

Filed under Legislative Updates, Partner Payroll, Product Information

28 responses to “How to process Medical Aid contributions on Pastel Partner Payroll 2013 Update 1

  1. Arnold

    This is a great idea but one comment – where do i find the download for the guide. Obviously I’m missing something or perhaps you could include the link?

  2. Shalinee

    Under the Legislative Upgrade must I click yes or no to changes made in the transaction tools? The metal provident fund and sick pay fund and site has not been calculated when I had clicked yes.

    • madeleinv01

      Hi Shalinee

      After installing 2013 Update 1, run the Legislative Release and select Yes to apply changes to calculations and transaction totals.
      SITE tax will no longer be calculated effective 01 March 2012 due to the income tax threshold now exceeding the SITE limit. Please refer to the document provided in my original post above for an explanation of how we replaced the SITE calculation with medical aid tax credits.
      The provident and sick pay fund calculation problem could be due to a number of reasons. My best advice would be to contact us at 011 304 4000 or email support@pastelpayroll.co.za with more detail on these issues. One of our consultants will then be able to troubleshoot to come up with a proper solution.

  3. Cathy

    Hi
    Cannot get an email through to support – is there a problem? I did a payrun before the update was available for download and now i have a ytd amount under code 6170 that apparently needs to be moved somewhere else and i dont know how to do it. Can you help me please

    • madeleinv01

      Hi Cathy

      Our Support Department can be reached on email support@pastelpayroll.co.za. Please note that this time of year is our busiest period but all our emails will be responded to within 48 hours.

      To process corrections on medical aid transactions, please do the following after installing version 2013 Update 1 and processing the Legislative Release to activate the new calculations:

      On the payslip benefits tab, override transaction code 6170 and enter the amount displayed in the YTD column as a negative.
      Do exactly the same for transaction code 6174. Leave transaction code 6172 as is.
      On the payslip deductions tab, ensure that transaction code 8002 is present and that the medical aid tax credit for the current period (I assume you process weekly) is calculated. Override transaction 8002 and take the current value multiplied by 2 (for the current week and the previous week you did not process the credit) and enter this value in the amount column.

  4. Ray

    Hi there

    I have only two employees who qualify for the tax credit. I have downloaded the new version and ran the Legislative Release. I’m not sure how to go about from here. Do I manually enter the tax credit amount and if so, under which tab? Or is Payroll supposed to update automatically?

  5. Greg

    Hi
    According to the guide, transaction code 6174 (Medical Aid Tax Deduction) is “not applicable”. I presume this means that it should be zero. I, however, still have a value reflecting under that code. What to do?

  6. Madelein van der Watt

    Hi Greg

    If you installed version 2013 Update 1, processed a Legislative Release and selected to add transaction code 8002, then the value for code 6174 should be zero unless the employee is 65 years or older and a company contribution towards medical aid was processed.
    If this is not the case, please contact our Support Team at support@pastelpayroll.co.za for one of our consultants to troubleshoot further.

  7. Frans

    Downloaded the updates – both 2013 1a and b and run the Legislative release.
    Medical Aid fine, but the Skills Levy now show up as ZERO and not calculated at 1%.
    How do I rectify this, without entering amounts manually?

    • Hi Frans,

      Thank you for your post. Because of your and Linda’s post we discovered this error and fixed it last night.
      We will be releasing a fix this morning.

  8. Dominique

    Hi there,
    I’m battling with the medical aid info download, keep getting the file has an error. Is there any other way you can send it you me.
    Thanks
    Dominique

  9. Gail

    I am battling to understand this medical tax credit. I have read the link and have noted the new codes and they are on the employees payslip. My question is, do you remove the codes 6170, 6172, 6174 or do they still remain on the contributions and default tabs?

    • Maritsa

      Dear Gail
      Please make sure that Transaction Code 6170 – Medical Aid Capped Amount and Transaction Code 6174 – Medical Aid Tax Deduction has zero amounts in the current period and that there is no amounts in the YTD on the benefits tab. If there are no amounts then you can delete them on the default tab and the benefits tab. The transaction that you need on the benefits tab is Transaction Code 6172 – Medical Aid Fringe Benefit. You will also note that you will get an exception if the correct transactions are not on the payslip.

      • Gail

        Hi Maritsa, thanks for your reply. There are YTD figures – so what do i do now? Do I tick the box and zero the figures out or how do i go about sorting this out?

      • Maritsa

        Dear Gail

        You need to tick the override box and then put in a negative of what in the YTD is so that the YTD clears to zero.

  10. Gail

    I am battling to understand this medical tax credit. I have read the link and have noted the new codes and they are on the employees payslip. My question is, do you remove the codes 6170, 6172, 6174 or do they still remain on the contributions and default tabs?

  11. Pam

    I have an employee with a gross of R 30000 plus R 2500 for medical aid with 3 members. How do I process (codes etc) the transaction if:
    1) The 100% debit order goes off his bank account or
    2) The 100% debit order comes off the company bank account?

    • Maritsa

      Dear Pam

      Before I can give you a detailed answer on this please can you tell me the following?
      For both options, as per his employee contract, how much does the company contribute and how much does the employee contribute?

      • Pam

        Hi Maritsa

        For both options, the company will be contributing 100%.

      • Maritsa

        Dear Pam

        If 100% of the medical aid debit order goes of his bank account will his income be R30000 gross plus R2500 for the medical aid or is the R2500 already included in the R30000 gross?

  12. Pam

    Its Basic: R 30 000 plus an additional R 2 500 for M/Aid.

    • Maritsa

      Dear Pam

      For both options you will need to add the dependants on the Masterfile under Edit…Masterfile…Statutory…Medical Aid tab. This will be the main member plus the dependants.
      The 100% debit order goes off his bank account and Its Basic: R 30 000 plus an additional R 2 500 for M/Aid.

      1) To process option 1 you will need to use the following codes to the default tab:

      Your basic salary will show R30 000
      You will need to create a new transaction code that is linked to 5740 – Taxable Allowance = R2 500 (Must also show on the Income tab)
      7085 – Medical Aid – Private = R2 500 (must also show on the Deductions tab)
      8000 – Med. Aid Tax credit applied = No amount needed (must also show on the Deduction tab)
      8002 – Medical Aid Tax credits = No amount needed (must also show on the Deduction tab)

      2) The 100% debit order comes off the company bank account?

      To process option 2 you will need to use the following codes to the default tab:
      9090 – Med. Aid Employer Amount = R2 500 (must also show on the Contributions tab)
      6172 – Medical aid Fringe benefit = No amount needed (must also show on the Benefit tab)
      8000 – Med. Aid Tax credit applied = No amount needed (must also show on the Deduction tab)
      8002 – Medical Aid Tax credits = No amount needed (must also show on the Deduction tab)

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