Last reviewed: July 2026. We review our guides regularly to keep them accurate.
Offering medical aid is one of the most valued benefits a small business can give its team, and it is often more affordable and easier to arrange than owners expect. A group arrangement can remove waiting periods and penalties that individuals would normally face, and the cost is shared between the business and the staff. This guide explains how group cover works for a South African small business, what it costs the employer, the tax position, and how to set it up properly.
By Hagop Jaghlassian, CEO of Curemed. Reviewed by Roxanne Hurter-Ehlers, Director of People and Governance.
Is a small business required to offer medical aid?
No. There is no law that forces a South African employer to provide medical aid. Many small businesses still do, because it is one of the strongest tools for attracting and keeping good people, and because group cover comes with advantages that individual cover does not. Treating it as a deliberate part of your package, rather than an afterthought, is what makes it work.
The real advantage of a group: the underwriting concession
This is the part that makes group cover genuinely different. When a compulsory group of around ten or more members joins a scheme together, schemes typically grant an underwriting concession. In practice that means the usual waiting periods are removed and late joiner penalties are waived for the group. New employees who apply to join within 30 days of starting are usually accepted without underwriting as well.
For an individual joining on their own, those waiting periods and penalties can be a real barrier, especially for someone joining cover later in life. Inside a qualifying group, that barrier largely falls away. It is often the single biggest reason a group plan is better value than each person arranging cover separately.
What it costs the employer
There is no legal minimum that an employer must pay. In practice many South African businesses share the contribution with staff, and splitting it roughly in half is a common starting point, though the share is entirely your choice and can be built into a cost to company package. The point is to decide a policy and apply it consistently. A broker can model a few split options so you can see the effect on both the business and take home pay before you commit.
The tax position, in plain terms
When an employer contributes to a medical scheme for an employee, SARS treats that contribution as a taxable fringe benefit for the employee. The same amount is also treated as a contribution made by the employee, which means it still counts toward the Medical Scheme Fees Tax Credit for that employee. The business generally claims its contribution as a deductible employment cost. The exact treatment depends on how your payroll is set up, so confirm the detail with your accountant or payroll provider before you finalise the structure. This follows the SARS fringe benefit rules for employer medical scheme contributions.
What if you have fewer than ten staff?
You can still arrange cover for a smaller team. The full group underwriting concession usually applies from around ten members, and the exact criteria vary by scheme, so for a very small team the terms differ and some underwriting may still apply. This is exactly where a broker earns their keep, by finding the scheme and structure that gives a small team the best possible terms.
How a broker sets up group cover
An accredited broker costs the business nothing extra, because the fee is built into the scheme contribution. For group cover a broker does the heavy lifting: comparing schemes for your team profile, negotiating the group terms, advising on the employer contribution split, handling the enrolment and the paperwork, and onboarding new joiners within the 30 day window so they keep the concession. Curemed has set up and serviced employer schemes as an independent, FSCA licensed brokerage (FSP 44098) since 1992.
Frequently asked questions
Is it compulsory for a small business to provide medical aid in South Africa?
No. There is no legal requirement to offer medical aid. Many employers choose to because it helps attract and retain staff and because group cover carries advantages that individual cover does not.
How many employees do you need for a group medical aid scheme?
The full group underwriting concession, which removes waiting periods and waives late joiner penalties, usually applies to compulsory groups of around ten or more members. Smaller teams can still be covered, but the terms vary by scheme.
Does the employer contribution count toward the medical tax credit?
Yes. Although an employer contribution is a taxable fringe benefit for the employee, SARS also treats it as a contribution by the employee, so it still counts toward the Medical Scheme Fees Tax Credit for that employee.
How much should an employer contribute?
There is no fixed amount or legal minimum. Many businesses split the contribution with staff, with roughly half being a common starting point, but the share is your decision and can be structured into a cost to company package.
Thinking about cover for your team?
We set up and run group medical aid for South African businesses, and structuring it costs you nothing extra. Let us model the options for your team.
For the wider context, see our pillar guide on how to choose a medical aid in South Africa, and if you run your own business solo, read medical aid for the self-employed.
