Doctors and allied health professionals often face higher tax rates, mixed income (employee, contractor and private practice), and industry-specific rules around GST and deductions. The keys to managing it are claiming the right professional deductions, choosing a suitable structure as income grows, and getting the GST treatment of medical services right. Here is a plain-English overview.
Deductions health professionals often miss
Common deductions include:
- Professional registration, indemnity insurance, college and association fees.
- Continuing professional development, courses, conferences and journals.
- Work-related equipment, and the work-related portion of phone, internet and a home study.
- Personal super contributions within the concessional cap, a valuable lever on higher incomes.
Is GST charged on medical services?
Most services provided by a recognised medical or allied health practitioner to a patient are GST-free, which is good news, but not everything is. Some services (for example certain reports, medico-legal work, or cosmetic procedures where no Medicare benefit is payable) can be taxable, and running a practice still involves GST on many of your costs. Because the line varies by service, it is worth confirming your mix so your invoicing and BAS are correct.
Structure and managing a higher income
As income grows, how you are set up matters more. Practising as a sole trader, through a company, or via a practice structure changes your tax, asset protection and flexibility, though personal services income rules can limit what a structure achieves for individual practitioners. This is an area where tailored advice genuinely pays for itself, both to stay compliant and to avoid paying more tax than you need to.
How MS Financial Services can help
We work with medical and allied health professionals on deductions, structure and practice finances. See our Business Advisory service or get in touch.
Frequently Asked Questions
What can doctors claim on tax?
Professional registration and indemnity insurance, college and association fees, CPD and conferences, work equipment, the work-related portion of phone, internet and a home study, and personal super contributions.
Are medical services GST-free?
Most services by a recognised practitioner to a patient are GST-free, but some (such as certain reports, medico-legal work, or cosmetic procedures with no Medicare benefit) can be taxable. Confirm your service mix.
Should a doctor use a company or trust?
It depends on your income and how you work. Structures can help, but personal services income rules limit what they achieve for individual practitioners, so it needs tailored advice.
How can high-income earners reduce tax?
Legitimately, through claiming all professional deductions, making personal super contributions within the cap, and using an appropriate structure where the rules allow.
Do allied health professionals need to register for GST?
Once turnover reaches $75,000, yes. Even where services are GST-free, registration lets you claim GST credits on business costs.