Tax Deductions for Locum Doctors in Australia: What You Can and Can't Claim
[15 min read | Locum Pay & Rates | May 2026]
TL;DR: Locum doctors in Australia can claim a range of tax deductions, including travel between workplaces, professional fees, and equipment costs. However, personal expenses like commuting and relocation are not deductible. Understanding these distinctions is crucial to managing your tax obligations effectively. For detailed guidance, refer to the ATO's guide for medical professionals.
- Locum doctors must manage their own tax obligations, including setting aside funds for PAYG instalments.
- Travel between work sites is deductible, but commuting from home is not.
- Professional fees, equipment, and CPD costs are generally deductible if related to current work.
Sources: 3 cited below ↓
How are locum doctors taxed?
Locum doctors operating under an ABN receive gross payments with no tax withheld. This means you must manage your tax obligations, including setting aside funds to cover your tax liability. After lodging your first tax return with ABN income, the ATO will enrol you in the PAYG instalment system. These are quarterly prepayments based on your estimated annual tax liability. Missing these payments can result in interest charges.
A practical approach is to set aside 30–40% of each payment you receive. The exact percentage depends on your total income, deductions, and business structure. This buffer helps prevent unexpected tax bills. If you're new to operating under an ABN, consider reading a guide on getting an ABN as a locum doctor before you start invoicing.
A$75,000
is the GST registration threshold for ABN turnover, ATO (2026)
What can locum doctors claim?
The ATO allows deductions for expenses incurred to earn assessable income, provided they are not private or domestic in nature. However, the line can be blurry for locum doctors. Here's a breakdown of what you can claim:
Car and Travel Expenses
Travel between two workplaces on the same day is deductible. For example, if you work a morning shift at one hospital and an afternoon shift at another, you can claim the travel between them. The ATO's guide for medical professionals clarifies that locums with no fixed base can treat each hospital as an alternative workplace, making more travel claimable. Home-to-work travel is generally not deductible, as confirmed in Mfula v Federal Commissioner of Taxation.
Two methods for calculating car expenses are available: the cents-per-kilometre method (88 cents per kilometre for up to 5,000 work-related kilometres per year) and the logbook method (record 12 consecutive weeks of driving to establish a business-use percentage).
Accommodation and Meals
Accommodation is deductible if you have a permanent home elsewhere, sleep away from it for locum duties, and declare a travel allowance as income. Meals follow the same rule: claimable only when you sleep away overnight for work and receive a bona fide travel allowance.
Professional Fees and Insurance
Deductible professional costs include AHPRA registration fees, medical indemnity insurance premiums, and memberships for professional associations such as RACGP, ACRRM, and ACEM. For more details, see the post on essential insurance and legal considerations for locum doctors.
Equipment and Uniforms
Equipment used exclusively for work, such as stethoscopes and diagnostic kits, is deductible. Items under A$300 can generally be claimed immediately, while more expensive equipment may need to be depreciated. Uniforms and scrubs are claimable if they are distinctive and occupation-specific.
Self-Education and CPD
CPD courses, conferences, and study directly related to your current work are deductible. The course must maintain or improve skills in your existing role. Registration fees, course materials, and associated travel are all deductible. For more information, refer to the guide on how to start as a locum doctor.
Phone, Internet, and Home Office
Claim the work-related proportion of phone and internet costs. Keep one month of records to establish the pattern, then apply it to the full year. Home office expenses can be claimed under the fixed-rate method (70 cents per hour worked from home) or the actual-cost method.
What can't locum doctors claim?
Common mistakes at tax time include:
- Normal commute: Driving from home to your first hospital of the day is a private expense.
- Relocation costs: Moving to a new city for a locum role is not deductible.
- Parking at your regular workplace: Not claimable if you work at the same hospital regularly.
- Meals without an overnight stay: Buying lunch during a long shift does not create a deduction.
- Clothing that is not occupation-specific: A suit or plain scrubs that could double as leisurewear do not qualify.
What does this mean for locum doctors in New South Wales?
For locum doctors working in New South Wales, understanding these tax rules is crucial. The state has a diverse range of locum opportunities, from urban hospitals in Sydney to rural health services. Travel between these locations can be deductible if it meets the ATO's criteria. However, commuting from a home base, such as travelling from a Sydney suburb to a local hospital, is not deductible.
Professional fees and memberships are essential for maintaining practice rights in New South Wales and are deductible. Equipment and uniforms specific to your role can also be claimed. However, ensure you keep thorough records to substantiate these claims, as the ATO can audit up to five years back.
Understanding and accurately claiming deductions can significantly impact your net income as a locum doctor.
