More Adelaide doctors are working on an ABN than ever — hospital locums through agencies, GP locums covering leave, VMOs, and consultants topping up a public appointment with private contract shifts. It pays well and it is flexible. It also drops you into four sets of tax rules that a salaried doctor never has to think about, and the ATO’s assumptions about how they apply to you are not the ones most locums make.
Here are the rules that actually matter, in the order they tend to go wrong.
GST: your locum fees are probably not GST-free
This is the one we see mishandled most, and it is worth being precise about.
Medical services are GST-free. That much every doctor knows. But the exemption attaches to a service supplied to the patient. The ATO’s position is that the recipient of a supply is whoever engages the practitioner to provide it — and where that is a clinic, hospital or agency rather than the patient, “the supply by the health practitioner to the clinic will not usually be GST-free”. The clinic’s onward supply to the patient is GST-free. Yours to the clinic is not.
So a locum paid a daily rate, an hourly rate or a percentage of billings by a practice, a local health network or an agency is making a taxable supply, and once registered for GST must add 10%. SA Health’s own billing guidance for sole-trader locums engaged by regional local health networks, published this month, says exactly that: GST is added to the fee where the locum is registered.
The picture flips if you bill Medicare directly under your own provider number, bulk billing or charging the patient, and pay the practice a service fee. Then your supply is to the patient and is GST-free, and it is the practice’s service fee to you that carries GST. Which model you are on determines everything, and it is set by the contract, not by what feels right.
Two more things. The registration threshold is $75,000 of GST turnover, and GST-free sales still count towards it — a doctor with $60,000 of Medicare billings and $20,000 of taxable locum fees is over the line. And once you are registered, every locum invoice needs to be a tax invoice. Retrospective registration after an agency queries your invoices is an unpleasant way to spend a quarter.
Personal services income: the agency is one client, not many
The personal services income rules exist to stop individuals routing what is really their own labour income through a company or trust to split it or defer it. Income “produced mainly from your skills or efforts as an individual” is personal services income, and the ATO names medical practitioners as a common example.
You escape the rules by being a personal services business, which means passing the results test or, failing that, getting under the 80% rule and passing one of three other tests. Here is where locums get caught.
If you obtain work through an agency, the agency is your client. The ATO’s guidance is explicit: “the source of the PSI you receive is the agency, not the end clients”. One agency placing you at six hospitals is one source. If 80% or more of your income comes from that one source, the 80% rule is failed and the PSI rules apply unless you pass the results test — which a locum paid by the day, using the hospital’s equipment, with no liability to rectify defects, does not. Registering with an agency is also “not making offers to the public” for the unrelated clients test.
When the PSI rules apply:
- The income is attributed to you personally, whatever entity received it. A company or trust gives no tax rate benefit and no income splitting. The ATO’s ruling makes the point that performing services through a company or trust does not, of itself, mean the income comes from a business structure; only a genuine business with assets, staff and goodwill sits outside the rules.
- Certain deductions are denied: rent, mortgage interest, rates and land tax on your home; payments to a spouse or family member for administrative work, and superannuation for them in that role; superannuation for an associate is deductible only where they do principal work, and then only up to the superannuation guarantee minimum.
- Deductions that do survive: professional indemnity, registration fees, arm’s-length wages, home office running costs, depreciation, tax agent fees.
None of this means a company is always wrong for a contracting doctor. It means the reason has to be something other than tax on locum income — asset protection, a genuine multi-practitioner business, or an intention to grow into one. If someone has set you up in a company “to save tax on locum work”, the PSI rules will very likely undo the saving and the ATO will expect the attribution to have been done correctly every year.
Superannuation: sole traders get it, companies do not
The superannuation guarantee has an extended definition of employee. If a contract is wholly or principally for your labour — more than half its value is your labour, you are paid for your personal skills rather than to achieve a result, and you cannot delegate — the engaging entity must pay superannuation on it at 12%, ABN or not.
A sole-trader locum on a daily rate fits that description. SA Health’s regional local health networks accept it: their guidance for contracted rural doctors says sole traders are treated as employees for superannuation purposes. Note, though, that the contract rate is usually inclusive of superannuation — SA Health’s worked example takes a $2,000 daily fee, carves out $214.29 for super, pays the balance to the doctor and calculates GST on the amount after super. Read the rate card with that in mind. The ATO is equally clear on the other side: “if you enter into a contract with a company, trust or partnership, you do not have to pay super for the person they employ to do the work”. So a doctor who contracts through a company gives up the 12%, and needs to make sure the company pays it instead.
Two 2026 changes matter here. Since 1 July, Payday Super requires the paying entity to get superannuation into your fund within seven business days of each payment, and that applies to eligible contractors as well as employees. And the ATO’s draft ruling on work arranged through intermediaries, issued in June, sets out that the entity with the direct contract with you — usually the agency — is the one with the obligation, and that where you contract through your own company, neither the agency nor the hospital has one. It is still a draft, but it is proposed to apply retrospectively when finalised.
Payroll tax: the 90-day rule, and why agencies count differently
Payroll tax is the practice’s or hospital’s liability, not yours, but it shapes how they engage you and it is increasingly written into locum contracts.
In South Australia, RevenueSA treats a contract between a medical centre and a practitioner as a relevant contract where the practitioner is supplying services to the centre’s patients for or on behalf of the centre, which makes your fees deemed wages in the centre’s hands unless an exemption applies. (General practices also have a separate bulk-billing-based exemption, covered in our payroll tax article.) The two exemptions that matter most for locums:
- Ninety days or fewer. If you work for that principal on no more than 90 days in the financial year, your fees are exempt. Any calendar day with any work counts as a day. RevenueSA’s own guidance gives the example of a GP working one day a week (48 days) being exempt, and two days a week (96) not.
- Services to the public generally. A practitioner running a genuine independent business that ordinarily serves multiple principals. RevenueSA accepts this without an application where you served two or more unrelated principals in the year and the principal used you on average ten days or less per month.
Agency locums are handled differently again: under the employment agency provisions the agency is the deemed employer and your fees are its deemed wages, with the hospital’s exemption able to flow through where it is a public hospital and gives the agency the required declaration. And payments by regional local health networks to contracted rural GPs and registrars for hospital work are exempt outright under a specific RevenueSA ruling. None of this is your bill, but understanding it explains why one practice will happily offer you 80 days a year and baulk at 100.
Travel and accommodation: the two-week placement and the six-month one
The question every regional locum asks is whether the flights, the accommodation and the meals are deductible. The answer depends on whether you are travelling on work or living at a location, and the ATO’s ruling refuses to give a bright line.
The factors it weighs: whether your regular place of work has changed, how long you are away, the nature of the accommodation, and whether your family comes with you or visits. Its worked examples are the useful part. A professional sent to another city for two weeks, staying in a hotel, is travelling on work — deductible. The same professional whose placement is extended to six months is living at the location — not deductible, however temporary it feels. Examples at four months and at 90 to 120 days go the same way. The ATO’s own doctor guide uses an employed GP flying to Menindee for a fourteen-day locum her practice requires her to take: accommodation and meals for the fourteen days deductible, airfares apportioned to the work portion, and the five sightseeing days added on the end not deductible at all.
You may have heard of a 21-day rule. It exists, but it is an employer safe harbour for fringe benefits purposes — away no more than 21 continuous days at one location and no more than 90 days in the year — not a rule of law, and exceeding it does not automatically mean you are living there. It is a reasonable rule of thumb and nothing more.
Three points specific to contractors:
- The ATO publishes reasonable travel allowance amounts each year — for 2026-27, for a doctor in the $153,211 to $272,680 band, Adelaide accommodation is $211 a night, larger South Australian regional centres such as Port Augusta and Naracoorte $207, other country centres $188, and dinner $77.65. But the substantiation shortcut those amounts unlock is available only to someone who receives and declares a bona fide travel allowance. A sole trader with no allowance must keep every receipt.
- Home to work is not deductible, and having several regular sites does not make you itinerant. The ATO’s transport ruling says travel to each regular workplace “is merely part of the ordinary necessity of getting to work”. Travel between two workplaces on the same day is deductible. Genuine itinerancy — a web of workplaces, uncertainty about where you will be sent, several sites before returning home — is a higher bar than most locums clear.
- If you do use your car for deductible work travel, the cents-per-kilometre rate is 91 cents for 2026-27, capped at 5,000 kilometres per car.
The cash-flow rules nobody warns you about
PAYG instalments. After your first return with contract income, the ATO will enter you into instalments if your instalment income was $4,000 or more, your tax payable was $1,000 or more and your notional tax is $500 or more. From then on you pay tax quarterly in advance, on 28 October, 28 February, 28 April and 28 July. If your income drops, you can vary the instalment down — but if the varied amount ends up below 85% of the actual tax, interest applies. The first year is the trap: a full year’s tax at lodgment, plus the first instalments for the following year, within a few months of each other.
No ABN, no invoice. A practice or agency paying you more than $75 without an ABN quoted must withhold 47%. Get the ABN before the first shift.
The $1,000 standard deduction does not cover ABN income. The new no-receipts deduction that started this year applies to assessable labour income, which the legislation defines by reference to salary, wages and similar payments subject to employer withholding. Sole-trader business income and income attributed under the PSI rules are outside that definition. A doctor with a public appointment and locum income on the side can claim it against the salaried part; a full-time ABN locum cannot.
What is deductible for a locum
Professional indemnity insurance, annual AHPRA renewal, college and association memberships, medical equipment (for an employee, immediately if $300 or less and otherwise depreciated; a sole trader carrying on a business may instead access the $20,000 small business instant asset write-off), the work portion of phone and internet, self-education that maintains or improves the skills you use now, tax agent fees, and travel that passes the test above. Not deductible: the initial cost of qualifications or registration that got you the work, and anything the PSI rules deny.
Rural placements: the money is real
If you are prepared to work outside Adelaide, the incentives are substantial and largely tax-neutral in the sense that they are simply income. The Commonwealth Workforce Incentive Program pays vocationally registered doctors in the more remote classifications rising annual amounts — up to $35,000 a year from the fifth year in MM6 locations and $60,000 in MM7 — provided you meet the quarterly activity threshold of at least $6,000 in eligible Medicare billings. SA Health’s Rural GP Agreement offers rural attraction payments of up to $50,000 for GPs beginning practice and providing hospital services in the most remote areas. Payments by regional local health networks to contracted rural doctors are made on a fee-for-service basis, with superannuation carved out of the fee and, where registered, GST added. Every one of these is assessable, and every one of them is worth having.
The locum’s checklist
- Read your contract for who the recipient of your supply is. That single fact decides your GST position.
- Register for GST before you pass $75,000, counting GST-free billings in the total.
- Assume the PSI rules apply if you work through one agency, and structure accordingly. Do not pay for a company to avoid tax that the rules will attribute back to you anyway.
- Know whether you are getting superannuation. Sole traders on labour contracts should be; companies will not be.
- Keep receipts for every night away. Reasonable allowance amounts do not help a contractor without an allowance.
- Put aside tax from the first invoice, and expect PAYG instalments from year two.
- Get the ABN, the provider number for each location, and the indemnity in place before the first shift.
Talk to us
We act for locum and contractor doctors across Adelaide and regional South Australia, and for the practices that engage them. If you are moving to ABN work, or have been doing it for a while without anyone checking the GST and PSI position, an hour now is cheaper than an amended return later.
You can read more on our accountants for medical professionals page. Related guides: our junior doctor’s guide to tax in Adelaide, our article on payroll tax and medical practices, and our guide to superannuation for Adelaide doctors.
Get in touch with our Adelaide team before your next placement.
This article is general information only and was prepared in September 2026. It does not take account of your objectives, financial situation or needs, and it is not tax, legal or financial product advice. Some of the guidance referred to is in draft form and may change. The application of the GST, personal services income and superannuation rules depends on the terms of each engagement, and you should obtain advice specific to your circumstances before acting.
