After more than twenty years as medical accountants here in Adelaide, we’ve noticed something: doctors rarely make small tax mistakes. The years of training that make you excellent clinicians also mean you enter serious income quickly, often with no time to learn the financial side — so when something is set up wrong, it tends to stay wrong for years, quietly compounding. These are the seven mistakes we see most often across the GPs, specialists, registrars and practice owners we act for in Adelaide and across South Australia.
1. Staying on the wrong structure long after outgrowing it
The structure that suited you as a first-year registrar — a tax file number and nothing else — is rarely the right one by the time you’re consulting privately, running sessions across two hospitals, or buying into rooms. We regularly meet doctors five or more years into private billing who have never revisited how they operate. The cost of the wrong structure isn’t only tax; it’s asset protection. Medicine is a profession where being sued is a planning assumption, not a paranoid fantasy, and the time to separate your assets from your practice risk is before there’s a problem.
2. Believing a company automatically saves tax
The most common misconception we correct. A colleague mentions their company, and suddenly everyone wants one. But most of what a doctor earns is personal services income — income generated by your personal skill and effort — and the tax law has specific rules that stop personal exertion income being split with a spouse or taxed at the company rate simply because it was billed through an entity. A company or trust still has legitimate uses for a medical professional: asset protection, employing genuine staff, running a true practice business with rooms, equipment and other practitioners. But structure follows substance. Anyone who promises a company will halve your tax as an employed specialist is selling you an audit.
3. Leaving legitimate deductions on the table
It cuts the other way too. Doctors are busy, cautious people, and many under-claim for years: AHPRA registration, medical indemnity premiums, college and exam fees, CPD and conferences, journals and subscriptions, home office use for after-hours reporting, income protection premiums held outside super. Individually modest; across a career, substantial. The pattern we see is a doctor lodging through a generalist — or through myGov at 11pm — claiming whatever occurred to them in the moment. A tax accountant who works with medical clients every week doesn’t need you to remember what’s deductible, because the checklist is already built.
4. Getting ambushed by Division 293
Every year we watch new consultants receive their first Division 293 assessment and assume it’s an error. It isn’t. Once your income and concessional super contributions together pass the threshold — currently $250,000 — the tax concession on those contributions is wound back by an additional 15%. It’s not a reason to stop contributing to super, which remains one of the best structures available to a high-earning doctor. But it is a reason to plan contributions rather than let them happen to you, and to know the assessment is coming before it arrives.
5. Paying down the wrong debt first
A doctor with a home loan, an investment property loan and a practice loan has three debts that are not equal. Interest on the home loan buys you nothing at tax time; interest on properly structured investment and practice debt is generally deductible. Yet we routinely see surplus income spread evenly across everything, or worse, aimed at the deductible debt first because it feels responsible. Ordering your debts correctly costs nothing and can be worth tens of thousands over a career. It’s the kind of unglamorous advice that never appears in a seminar, and it’s where a good accountant quietly earns their fee.
6. The first year of private billing — and the tax bill nobody warned you about
As an employee, tax is withheld before you ever see the money. The year you start private billing — VMO sessions, assisting, a private list — nothing is withheld at all. Twelve months later a tax bill arrives for the entire year, followed shortly by PAYG instalments for the year already underway. Two years of tax, landing at once, at exactly the moment you’ve committed to the bigger mortgage. It is entirely predictable and entirely avoidable: put a fixed percentage of every private dollar somewhere you can’t casually spend it, from the first invoice. We tell every registrar this. The ones who listen thank us; the ones who don’t become case studies for point six.
7. Practice owners: sloppy contractor arrangements and the payroll tax problem
If you own rooms and engage other doctors, the stakes change. State revenue offices around Australia, including here in South Australia, have sharpened their attention on whether payments flowing to contractor doctors fall within the payroll tax net — and practices with informal, undocumented arrangements are the ones with the least room to move. The way your service agreements are drafted, the way money flows, and the way your service entity is structured all matter enormously now. If your practice arrangements were set up years ago and haven’t been reviewed since, that review is overdue — not because everything is necessarily wrong, but because you want to find out on your own terms rather than the Commissioner’s.
What a medical accountant in Adelaide actually does differently
None of the mistakes above requires a rare genius to avoid. They require someone who sees medical clients all day — who has watched a hundred doctors move from training to private practice, who knows what the ATO looks for in this profession, and who raises the issue the year before it bites instead of the year after. That’s the real difference between a generalist and a specialist: not cleverness, timing.
Nitschke Nancarrow has specialised in the finances of doctors and medical professionals for over twenty years, from our office at Myrtle Bank in Adelaide. If any point above landed uncomfortably close to home, get in touch or call 1300 059 670 — the first conversation is about where you stand, not a sales pitch.
This article is general information only and doesn’t consider your personal circumstances. Get advice specific to your situation before acting on anything here.
