Locum Life Biz Setup: The Doctor Will See Your Tax Return Now

Whether you’re diving into your first locum shift or you’ve been bouncing between clinics like a stethoscope on a speed bump — welcome to the wonderful world of locum life.

Yes, the pay’s flexible, the hours are yours, and your scrubs game is strong. But so is the tax admin. And like that one patient who “just googled it,” the paperwork will catch up with you if you’re not prepared.

So here’s your no-BS, totally readable guide to getting your locum business sorted — with zero jargon and maybe a few puns.

🧬 Business Setup: Let’s Get You Legally Legit

Before you touch a patient or invoice a practice, let’s make sure your business foundations are stronger than your Wi-Fi in a rural clinic.

✅ Task	🩺 Why It Matters
Apply for an ABN	So you can invoice clinics and get paid properly. Apply here
Register for GST (if earning over $75K)	Most medical services you provide as a locum (like diagnosing, treating, or preventing illness) are GST-free BUT we still recommend registering so you can claim input tax credits on eligible business expenses. https://www.ato.gov.au/business/gst/registering-for-gst/
Set up a business bank account	Keep your business income and expenses away from your Sunday brunch habit.
Choose accounting software (like Xero)	Because spreadsheets don’t diagnose errors — they cause them. Xero setup for sole traders
Decide on a business name (optional)	“Dr Sarah Smith” is fine. “Needle Me Alone Medical Services” is a vibe.

💡 Locum Logic Tip: Your chart of accounts is like your drug cupboard — neat, labelled, and potentially lifesaving.

💼 Income & Invoicing: Send It and Get Paid (Correctly)

You’re working across clinics, hospitals, and possibly via agencies. That’s a lot of income to track. So let’s make it smooth and surgical:

✅ Task	💡 Why It Matters
Create an invoice template (with your ABN)	It’s your official “please pay me” form. Add GST if required and this will depend on the services you are providing.
Track all income sources	Know where your money’s coming from (and where to chase it).
Set aside 30–40% of income for tax	Because the ATO doesn’t take “but I forgot” as a payment plan.

💡 Pro Tip: Xero bank rules = automatic sorting. You focus on patients, let software do admin.

🔥 Even Hotter Tip Now you’re no longer employed no one is withholding tax for you on your earnings. This means that your tax liability is paid at the end of the year (or through quarterly PAYGI Instalments) so don’t get caught out with no money set aside 😉

📊 Tax & BAS Obligations: Keep the ATO Off Your Case

The ATO loves locums. Not for your witty bedside manner, but because many don’t lodge things properly. Be better than that.

✅ Task	🧾 Why It Matters
Lodge your income tax return annually	Include everything. Clinics, agencies, even one-off shifts and deductions. ATO guide for medical professionals
Register for PAYG instalments (if required)	Makes tax-time less painful by spreading payments across the year and avoid the double whammy of tax. https://www.allinadvisory.com.au/post/the-double-whammy-of-tax-ouch
Lodge BAS quarterly (if GST-registered)	Tells the ATO how much you collected (and what you want back). Use Xero's Activity Statement feature to simplify.
Reconcile GST to your balance sheet or P&L	If it doesn’t balance, something’s broken — probably your data, not your stethoscope.

💡 Bonus tip: In Xero, use “Lodge & create draft bill” to auto-allocate tax liabilities once you have lodged the BAS. No calculator required.

📁 Record Keeping: Save It or Suffer

Let’s avoid the shoebox full of receipts (or worse, the “I’ll deal with it later” method).

✅ Task	💾 Why It Matters
Keep receipts and invoices	Proof = deductions. No proof = tears.
Reconcile bank transactions monthly	Less mess. Fewer errors. More coffee breaks.
Use Dext or Hubdoc for receipts	Snap, upload, sync. Done.
Clear suspense/clearing accounts	If it says “suspense,” it shouldn’t be a mystery. Investigate before you lodge.

💡 Watch out for duplicate bills in Dext — those “RB” ones are sneaky.

💸 Deductible Expenses: What You Can Actually Claim

This is where things get fun — and valuable. These are the legit deductions that can reduce your tax (no dodgy tricks required):

✅ Expense	💡 Notes
Medical indemnity insurance	100% deductible. It’s protecting you — and your tax refund.
Registration + licensing	Think AHPRA, CPD courses — all claimable.
Work-related travel & accommodation	If it’s for locum work, it counts.
Uniforms & protective gear	Scrubs, lab coats, PPE (not your Gucci slides).
Accounting & legal fees	Including the folks who wrote this blog 😉
Equipment & tech	Stethoscopes, laptops, phones, tools of the trade.
Home office expenses	Yes, your admin-from-home setup counts too. Check out this blog for more info. https://www.allinadvisory.com.au/post/i-worked-from-home-last-year-what-can-i-claim

💡 Need help? The Locum Tax Deduction Guide is your new best friend (besides us, of course).

⚠️ Common Pitfalls (a.k.a. What NOT to Do)

Don’t become the cautionary tale your accountant whispers about in team meetings. Here's what to avoid:

❌ Pitfall	✅ Fix
Forgetting to register for GST	Register early if needed.
Lodging BAS late	Set reminders and use software to stay on track. The ATO love to issue a late lodgement penalty.
Mixing personal + business expenses	Use a separate bank account. Always.
Uploading quotes instead of invoices	Confirm the doc before uploading to Xero.
Not saving for tax	Open a separate “Tax Time” savings account. Trust us.

🔁 Ongoing Tasks: Because You’re a Biz Now

📅 Task	🔁 Frequency
Bank reconciliation	Monthly
BAS lodgement	Quarterly
Income tax return	Annually
PAYG instalments	Quarterly (if applicable)
Review deductible expenses	Ongoing (your future self will thank you)

🩺 Final Diagnosis: You're Not Just a Doctor — You're a Biz Owner

Locum life is all about flexibility, freedom, and… figuring out GST and tax. But with the right setup, systems, and support, you can focus on healing people, not hustling paperwork.

If you want help ticking off your checklist, cleaning up your books, or just figuring out WTF a suspense account is — we’re here, stethoscopes optional.

So reach out to our team. We’ll make your numbers work harder than your stethoscope on a night shift.

Disclaimer: This blog is general in nature and doesn’t take into account your individual situation. Always seek advice from a qualified accountant or tax advisor (hey, that’s us!).