Topic
Working as a locum or contractor doctor: tax and setup
Locum and contractor doctors usually bill through their own ABN, which brings obligations an employee doesn’t have: deciding whether to register for GST, lodging BAS if you are registered, setting aside tax because nobody withholds it for you, and checking the personal services income rules. These guides take each step in order, from your ABN to your first BAS.
What these guides cover
- ABN or employee: how the arrangement is decided
- GST on locum and contractor income
- Your first BAS and when it is due
- PAYG instalments and setting aside tax
- Sole trader or company for a contractor doctor
Guides in this topic
Guides for this topic are on the way.
Frequently asked questions
Do I need an ABN to work as a locum?
If you are engaged as a contractor rather than an employee, you generally need an ABN to invoice for your work. If an agency or practice employs you, it withholds tax from your pay and you don’t need an ABN for that work.
Am I a contractor or an employee?
It depends on the whole working relationship, not just the label in your agreement. The ATO’s guidance on employees and independent contractors sets out how it is decided.
Do locum doctors have to charge GST?
It depends on what you supply and to whom. Many medical services are GST-free, but some arrangements between doctors and practices are not. Our GST guide sets out the rule and its source.
How should I set aside tax as a locum?
Move a share of every payment into a separate account so the bill at the end of the year is covered. Your accountant can suggest how much based on your income.
What does DrBooks do for locums?
On DrBooks Pro: monthly bookkeeping and BAS, your sole-trader or company tax return, tax planning with a senior tax agent and a dedicated accountant on a direct line.
Sources
Last reviewed: · Colin Lua, registered tax agent