What you can claim depends on your structure: employee, contractor, sole trader, partner, or company or trust owner. The ATO also reports that work-related expenses made up 53% of individual deductions in 2023-24, so this is a closely watched area.
This guide covers Australian rules for 2026-27, legitimate deductions, year-round planning, records, and the claims that attract attention. Verify dates and thresholds against current ATO guidance before acting.
Key Takeaways
- Your income structure decides which deductions, super options and planning tools apply.
- Registration, indemnity, CPD, equipment, home-office, travel and practice costs are the main deduction groups.
- Claim only costs connected to assessable income, and apportion mixed-use items.
- Review tax, super and cash flow during the year, not at lodgment time.
Start With Your Australian Tax Position: Employee, Contractor or Practice Owner
Why income type and structure matter
The ATO looks at the whole working arrangement, not the label on the contract. Status drives deductions, GST, super and payroll treatment, so settle it first.
- Employees receive salary with PAYG withholding. Deductions are limited to work-related costs the employer did not reimburse.
- Contractors and locums earn business income. They may need an ABN, GST registration (generally at A$75,000 turnover), PAYG instalments and their own super planning.
- Practice owners carry business-level obligations, including payroll, GST and staff super.
A contractor's ability to claim business expenses does not carry over to an employee doing similar clinical work.
Personal services income (PSI) is income mainly earned from your own skill and effort. If it flows through a company, partnership or trust, it can be attributed back to you.
A business can escape the PSI rules by passing a test: results, unrelated clients, employment or business premises. Hourly or daily pay generally does not meet the results test. Even a passed test does not switch off the general anti-avoidance rules.
Private practice and entity considerations
Structures differ in who is taxed and how.
| Structure | How it is taxed |
|---|---|
| Sole trader | Profit reported in your own return at marginal rates |
| Partnership | Partners assessed on their shares |
| Company | 25% for base-rate entities (turnover under A$50m), otherwise 30% |
| Trust | Depends on beneficiary entitlement and trustee assessment rules |
For 2026-27, resident marginal rates (excluding Medicare levy) are:
- Nil up to A$18,200
- 16% up to A$45,000
- 30% up to A$135,000
- 37% up to A$190,000
- 45% above A$190,000
Income splitting, payments to relatives and trust distributions must reflect genuine work and commercial arrangements. Arrangements built only to cut tax invite scrutiny, and the ATO flags distributions to lower-taxed associates as a risk area. Service-entity fees also need a real commercial explanation.
Mixed income and cross-border situations
Salary, locum work, consulting, telehealth, teaching and research should each be recorded separately. Each stream may be treated differently.
For India-Australia income, assets or family transfers, residency, source of income, the treaty and foreign income tax offsets all matter. Australian residents generally report worldwide income.
A foreign income tax offset may relieve double tax in the year the income is included. These questions need advice covering both countries.
Maximize Legitimate Tax Deductions Available to Doctors
The ATO's doctor guide sets three tests: you paid it and weren't reimbursed, it relates directly to earning income, and you have evidence.
Professional costs, registration and insurance
- Annual Ahpra practising-certificate renewal (not initial registration)
- AMA or college membership fees
- Work-related professional indemnity insurance
- Accounting fees for managing tax affairs
- Legal advice for the practice
Employer-reimbursed costs, private insurance and mixed-use items must be excluded or apportioned.
Education, conferences and professional development
CPD, journals, seminars and conferences are deductible when they maintain or improve skills in your current role. Study that qualifies you for a new income-earning activity is not.
Conference travel, accommodation and meals can qualify, but any private component must come out. Keep the program, receipts and a note of purpose. A travel diary is generally needed for six or more consecutive nights away.
Equipment, technology and practice supplies
Instruments, diagnostic equipment, computers, phones, software, practice-management systems, telehealth tools and consumables can all be claimed, depending on structure.
- Eligible small businesses (aggregated turnover under A$10m) can write off the business portion of assets under A$20,000 each from 1 July 2026.
- Costs of A$20,000 or more generally go to the small-business pool.
- Under the ATO's effective-life determination, autoclaves, electric examination beds and medical refrigerators have an 8-year effective life.
- Employees' low-cost assets are items under A$1,000.
Confirm eligibility, the date the asset was first used and business-use share before claiming.
Home office, travel and vehicle costs
The ATO's fixed rate for 2024-25 and 2025-26 is 70c per hour. The ATO has not yet published a 2026-27 rate, so check the current figure. The alternative is actual costs, apportioned for work use.
A rheumatologist working from home on telehealth can claim additional running costs if the rules and evidence are met, but there is no blanket telehealth deduction.
Employees generally cannot claim occupancy costs such as rent or mortgage interest unless the home has the character of a place of business. Occupancy claims can also affect the main-residence CGT exemption.
On the road:
- Home-to-regular-work travel is private.
- Travel between work locations or to patients may qualify.
- The 2026-27 cents-per-km rate is 91c, capped at 5,000 km per car.
- The logbook method uses your evidenced business-use percentage.
Practice overheads and overlooked categories
Commonly missed items, each subject to a direct business connection:
- Bookkeeping and billing systems
- Website and marketing
- Bank and merchant fees
- Rent and staff costs
- Secure record storage
- Work-related phone and data
Paying from a business account does not make a cost deductible.
Expenses that should not be claimed automatically
Private medical costs, family expenses, ordinary clothing, living costs, private portions of mixed-use assets and reimbursed expenses are not automatically deductible. Every claim needs an income connection, correct apportionment, and records showing date, amount, purpose and payer.
Use Year-Round Tax Planning to Reduce Surprises
Superannuation and retirement planning
For 2026-27 the concessional cap is A$32,500. Unused cap can be carried forward up to five years if your total super balance was under A$500,000 at the prior 30 June. Division 293 adds 15% tax where income plus relevant concessional contributions exceeds A$250,000, which affects many specialists.
- Employer super: Payday Super applies from 1 July 2026. SG is 12% and generally must reach the fund within seven business days of payday.
- Personal deductible contributions: lodge a notice of intent and receive acknowledgement before lodging your return or by the end of the following income year, whichever is earlier.
- Practice contributions: coordinate with owner remuneration and cash flow.
Match the approach to your income mix and practice structure; not every option fits every doctor.
Cash-flow, PAYG and GST planning
Contractors and practice owners should set aside cash for:
- Income tax and PAYG instalments
- GST, super and payroll
- Other practice liabilities
Many medical services are GST-free, but cosmetic procedures and some clinic-to-practitioner supplies are not. Who contracts with the patient drives the GST treatment.
Build a monthly or quarterly forecast that reconciles expected income, deductible spending, instalments and planned capital purchases. Weekly financial reviews help at the practice level.
Timing income and expenditure
Legitimate timing means reviewing planned equipment purchases, chasing outstanding invoices and deciding which year a cost belongs in. Prepaid expenses may need apportioning, though a 12-month rule can apply to eligible small businesses. Purchases made only to create a deduction are not a plan.
Structure and practice-growth reviews
Revisit structure when income, staff, risk or profitability change materially. Weigh the tax benefit against accounting, compliance and administration costs, and test any restructure against PSI and anti-avoidance rules first. Fold succession planning into the same review.
Investment, family and charitable planning
Investment deductions, family wages and asset ownership all depend on ownership, purpose, documentation and current law. Donations are deductible only for genuine gifts to deductible gift recipients with no material benefit. Be wary of property, trust, gifting or income-splitting schemes sold as guaranteed savings. Promoter penalty laws apply to those arrangements.
Records, Deadlines and Red Flags
Build a defensible recordkeeping system
Keep records generally for five years from lodgment:
- Invoices, receipts and payment evidence
- Contracts and registration renewals
- CPD records
- Travel diaries and vehicle logbooks
- Home-office calculations
- Notes of business purpose
Separate practice and personal banking, and use accounting software to track income, GST, expenses, assets and reimbursements.
Review the Australian tax calendar
| Item | 2026-27 date or rule |
|---|---|
| Income year end | 30 June 2027 |
| Self-lodged return | 31 October 2027 |
| Quarterly BAS and PAYG instalments | 28 Oct, 28 Feb, 28 Apr, 28 Jul |
| Super (SG) | Within 7 business days of payday |
| STP finalisation | 14 July 2027 |
Weekends and holidays move dates, and registered agents have their own lodgment program. Confirm everything with the ATO before relying on it.
Recognise high-risk or unsupported claims
These claims often trigger penalties and interest:
- Inflated deductions
- Invented business purposes
- Undocumented cash expenses
- Improper family payments
- Private spending run through a practice
Shortfall penalties are generally 25% for failing to take reasonable care, 50% for recklessness and 75% for intentional disregard. The general interest charge is 11.51% p.a. for October to December 2026.
Get advice from a qualified Australian tax professional before changing entities, setting up complex trusts, planning cross-border or making major investments.
Conclusion
The best tax outcomes come from correct classification, legitimate deductions, timely super and cash-flow planning, and consistent records. There's no single trick.
VJM Global, with 30+ years of experience, supports Australian businesses with accounting, tax compliance and India-Australia cross-border needs. Every doctor's circumstances differ, so tailored advice matters.
Frequently Asked Questions
Does a doctor pay income tax in India?
An Indian tax resident can be taxed on worldwide income, and a non-resident can be taxed on India-sourced income. For Australian residents, tax liability depends on residency, income source and the treaty. Get advice covering both countries.
What are the most overlooked tax deductions for doctors?
AHPRA renewal, indemnity insurance, CPD, practice software, eligible home-office costs and business travel. Each needs an income connection and records.
Can a doctor gift 20 lakhs to their daughter without tax?
Under India's Income-tax Act 2025, a genuine gift from a parent who is a relative is generally not taxed in the recipient's hands. An Australian-resident recipient should keep evidence it is a genuine gift and not disguised income.
What tax deductions can doctors claim in Australia?
Common categories are professional costs, CPD, equipment, practice overheads, eligible home-office expenses and work travel. Employees, contractors and practice owners are treated differently.
Are medical conference and CPD expenses tax deductible for doctors?
Generally yes, when they maintain or improve skills in your current role. Private components, employer reimbursement and travel rules can reduce the claim.
How should doctors keep records for tax deductions?
Keep invoices, receipts, payment proof, purpose notes, travel and vehicle logs, and home-office calculations. Track practice and personal spending separately.
