Industry

Accountants for doctors, nurses, dentists and allied health

Registered tax agent · Shepparton North, by appointment · Australia-wide by phone, WhatsApp and video · Updated October 2026

A health career rarely has one tax profile. A registrar on a hospital payroll, a locum invoicing through a company, a dentist who owns the practice and a physiotherapist renting a room each face different rules. SMT Accounting works with medical and allied health professionals at every stage, on fixed fees, with a registered tax agent on every lodgement.

On this page

Hospital employees and salary packaging

Public and not-for-profit hospitals and public ambulance services are exempt from fringe benefits tax up to a cap of $17,000 grossed-up value per employee per FBT year, plus a separate $5,000 cap for salary-packaged meal entertainment and entertainment facility leasing. The cap is per employee per employer, so moving between hospitals mid-year changes the arithmetic. And benefits that are exempt only because the hospital is an exempt employer are still reportable fringe benefits: the grossed-up amount lands on your income statement and counts in income tests for the Medicare levy surcharge, study loan repayments and some offsets. We model the whole return before telling you how much to package. See individual tax returns.

Locums, contractors and the PSI rules

Income that is mainly (more than 50%) a reward for your personal effort or skill is personal services income, and the ATO names medical practitioners among its common examples. Whether they apply depends on the personal services business tests. The results test requires, for at least 75% of your PSI, that you are paid to produce a result rather than for time, supply your own equipment where needed, and are liable to fix defects at your own cost; a locum on a daily rate is unlikely to meet it. The other tests (unrelated clients, employment and business premises) each come with the 80% rule. When the rules apply, the income is attributed to you personally, deductions are limited and the entity may have extra PAYG withholding obligations. A company can still be right for a locum, but it has to be justified on the tests, and we document that each year.

Practice owners and service entities

Many practices use a service entity, often a company or trust, that owns the rooms, equipment and staff and charges practitioners a service fee, with each practitioner running their own practice. Done carelessly it attracts attention under the PSI rules, Division 7A and payroll tax. The service fee needs to be commercial, the agreements need to match what actually happens with patient fees and Medicare rebates, and the accounts need to show the money flowing the way the contracts say. We review the structure annually against the current rulings and your business and company tax position.

Payroll tax on medical practices in Victoria

The State Revenue Office has a published position on medical centres. Revenue Ruling PTA-041 explains when a contract between a practice and a practitioner is a "relevant contract", so that payments to the practitioner are treated as wages for payroll tax. The ruling says the provisions are likely to apply where the practice provides the public with access to practitioners, engages them to serve patients on its behalf, and no exclusion applies. The exclusions the SRO lists as most relevant are services provided for 90 days or less in a financial year, practitioners who ordinarily provide services to the public generally, and work performed by two or more persons. From 1 July 2025 Victoria also exempts GP business wages to the extent they relate to fully funded (bulk-billed) items of GP work; the SRO states this does not extend to dental or allied health businesses. The SRO assesses arrangements case by case, so seek advice on your own contracts before relying on any of this.

Registration, CPD and other deductions

Registration

Renewing a registration or practising certificate you need for your current role is deductible; the ATO's example is a nurse's annual renewal. The initial registration to enter the profession is not.

CPD and conferences

Courses, seminars and conferences are deductible when they have a sufficient connection to your current work: maintaining or improving the skills you use now. A nurse completing a medical degree to become a doctor is the ATO's example of what is not deductible.

Everything else

Indemnity insurance, professional memberships, union fees, travel between workplaces, equipment and the work share of phone and internet.

Conference travel: the conference days are claimable, the holiday either side is private, and anything your employer reimburses is not.

Investment property and tax planning

Higher marginal rates make negative gearing and other investment questions common in this profession. We prepare rental schedules, split income and deductions correctly between joint owners, and model what a loss does to your overall return. We do not recommend financial products or tell you what to buy; our role is the tax position, delivered through tax planning and advisory and our rental property deductions guide.

What SMT does for health professionals

  • Individual tax returns with salary packaging, reportable fringe benefits and rental schedules handled correctly.
  • PSI assessments for locums and contractors, documented each year, with the right PAYG withholding and reporting if the rules apply.
  • Practice and service-entity accounting, company and trust tax returns, Division 7A loan management and BAS.
  • Payroll tax registration and reconciliation guidance.
  • Tax planning before 30 June, so structure, super and investment decisions are made with the numbers in front of you.

Fixed fees, a registered tax agent on every lodgement, and video or WhatsApp appointments that fit around shifts.

General information, not advice. Checked against the ATO and SRO pages under Sources in October 2026; thresholds change and your position depends on your own facts, so talk to us before relying on it.
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Frequently asked

I'm a locum GP invoicing through my own company. Does that save tax?

Often less than people expect. Income that is mainly a reward for your personal skill is personal services income, and unless your company passes one of the ATO's personal services business tests, the income is attributed back to you and taxed at your marginal rate. Being paid an hourly or daily rate makes the results test hard to pass. We assess each contract against the tests before you rely on a structure.

Is my AHPRA registration renewal deductible?

Yes, renewing a registration you need to keep working in your current role is deductible. The ATO's example is a nurse renewing annual registration. The initial cost of obtaining registration before you start earning in the role is not deductible, because it is incurred to get the job rather than in doing it.

Does salary packaging at a public hospital affect anything else on my return?

It can. Benefits packaged under the hospital cap are exempt from FBT, but the ATO still treats them as reportable fringe benefits. The grossed-up amount appears on your income statement and feeds into income tests for things such as the Medicare levy surcharge, study loan repayments and some offsets and government payments. We check the overall effect before recommending how much to package.

Does my practice have to pay Victorian payroll tax on contractor doctors?

Possibly. The State Revenue Office has a published ruling on medical centres that can treat payments to contracted practitioners as wages, subject to exclusions such as practitioners working 90 days or less in a year or genuinely serving the public generally. From 1 July 2025 there is also an exemption for GP businesses tied to fully funded (bulk-billed) consultations. It is fact-specific, so get advice on your own contracts rather than relying on what another practice does.

Sources

Hospital payslip, locum invoices or a practice to run?

Send us your income statement, contracts and last return and we'll show you where the packaging, PSI and payroll tax questions sit.

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