Tax and accounting for medical specialists.
Whether you split your time between a public hospital VMO role and private rooms, or run a fully private specialist practice, personal services income rules mean the fee for your professional effort generally can't be split off to a lower-taxed entity, even where a service arrangement sits around it properly. This guide covers what specialists typically claim, where GST gets complicated around medico-legal and expert-witness work, and how service entities and payroll tax risk fit together for contracted specialists. We're Brisbane based and work with medical specialists across Australia.
Updated July 2026 · Reviewed by the LINK Advisors team
What medical specialists can claim.
Ordered by typical value. Every claim still has to pass the ATO's tests: you paid for it, it relates to earning your income, and you can show a record.
College fellowship, registration and indemnity insurance
Often the largest fixed costs in a specialist practice, these are generally deductible.
CPD, conferences and subspecialty training
Continuing professional development and training that builds on your existing specialty are generally deductible.
Room or service fees
Fees paid to a practice or hospital-adjacent service entity for rooms and admin support are generally deductible, provided the arrangement is commercial and documented.
Procedural and clinical equipment
Equipment used in consultations or procedures is generally deductible, either claimed outright or depreciated depending on cost - check the current instant asset write-off threshold with us.
Income protection insurance
Premiums for income protection held outside super are generally deductible.
Locum cover and associated travel
Costs of arranging locum cover, and travel associated with it, are generally deductible.
Journal subscriptions and clinical reference tools
Subscriptions relevant to your specialty are generally deductible.
Administrative and secretarial support
Costs of admin and secretarial support for your practice are generally deductible.
Work vehicle
Travel between hospital, rooms and procedure venues is generally deductible for its business-use portion.
Professional association and CPD program fees
Membership and CPD program fees required to maintain your fellowship are generally deductible.
GST and BAS, done right.
Specialist consultations and medically necessary procedures are generally GST-free. The trap for specialists specifically is report and opinion work that isn't for the patient's own treatment, medico-legal reports, independent medical examinations for insurers, or expert witness work, which can fall outside the GST-free medical definition depending on its purpose, even when it looks and feels like clinical work.
Where a procedure involves separately billed facility or equipment fees alongside your professional fee, those components can carry different GST treatment from your consultation, so it's worth confirming rather than assuming the whole invoice is GST-free.
Specialists doing a genuine mix of clinical practice and expert or medico-legal work usually need two clearly separated income streams in their accounting, not because the ATO requires it in form, but because getting the GST wrong on the report-writing side is one of the easier things for an audit to pick up.
The right structure for the work.
Personal services income rules are most acute for specialists, since so much of your income reflects personal clinical effort that can't simply be attributed to a trust or a family member's lower tax bracket. Service entities remain a legitimate way to structure rooms, staff and admin, provided the fees are commercial and the paperwork matches reality, and contracted specialist arrangements are under real payroll tax scrutiny in several states right now, with outcomes turning on your specific contracts. Coordinating a hospital VMO role alongside private rooms also benefits from being planned as one picture rather than two separate arrangements that happen to share your name.
Run the work, we run the numbers.
Specialist practices typically run billing across Medicare, private health funds and hospital sessional payments, and getting all three reconciled into Xero without gaps is where a lot of specialist bookkeeping goes wrong. We build reporting that shows session fees, private billings and any medico-legal income as separate, trackable lines, so you can see what each part of your work actually contributes rather than one blended number.
Frequently asked questions.
Can I split my specialist income with a family trust?
Generally no, for the income that reflects your own professional effort. Personal services income rules attach that income to you regardless of the entity invoicing for it.
Is medico-legal or expert witness income GST-free?
Often not. Where the work is a report or opinion for a purpose other than the patient's own treatment, it can fall outside the GST-free medical definition depending on what it's for.
Does payroll tax apply to me as a contracted specialist?
It might. Several state revenue offices have applied payroll tax to contracted practitioner arrangements, and the outcome depends on your specific contracts. Worth having this reviewed given how live the issue is right now.
Are service entity fees I pay deductible?
Generally yes, provided the fees are commercial and the arrangement is properly documented.
Should my VMO and private rooms work sit under one structure?
It's worth planning both together rather than as separate arrangements, since decisions in one affect the tax and structuring position of the other. We model the whole picture before recommending anything.
Talk to an accountant who knows specialist businesses.
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