MY EMPLOYER PAYS MY FULL MEDICAL AID IN LIEU OF SALARY INCREASE.

Regardless of who pays for your medical aid you will still be entitled to the medical tax credit per month. If your employer pays then you will be taxed on this amount he pays, but you will be able to pay less in tax each month because the credit will get taken off. If you pay it yourself you will only be able to get the tax credit at the end of the tax year and should receive a refund.

If your employer pays on your behalf you generally are in a better after tax cash situation each month.