Tax Deductions for Doctors Explained – What You Can and Can’t Claim

Doing taxes as a doctor is rarely simple. Between hospital shifts, private practice, and locum work, most medical professionals don’t have time to sort out what’s claimable. Tax deductions for doctors can get complicated with multiple income sources, complex roles, and strict ATO rules. Missed claims mean paying more; wrong ones risk an audit.

That’s where experienced tax accountants for doctors come in, helping to make sense of the details, apply the right structure, and ensure everything lines up with current tax laws. Knowing which deductions apply to your role can make a big difference come tax time.

Let’s break down what you can claim, what you can’t, and how to make those deductions work for you as a medical professional. 

Who Can Claim Medical Tax Deductions?

Tax deductions vary depending on your role and setup: 

1. Employed doctors (e.g. QLD Health Service or Local Health Districts) can only claim work-related expenses not reimbursed by the employer.
   
   
2. Self-employed locum doctors, contractors, and clinic owners can claim a wider range, including business expenses like rent and staff wages.
   
   
3. Your structure, such as being a sole trader, company, or trust, affects what counts as deductible and how you claim it.

If you're operating through a medical practice entity, deductions need to be carefully recorded and allocated.

Common Tax Deductions for Doctors

Medical professionals can claim a wide range of tax-deductible expenses, with the tax benefit depending on how they work and how their income is structured. Here are some of the most common and legitimate deductions available to doctors:

• Tools and equipment: Items like stethoscopes, diagnostic tools, medical bags, and other essential medical supplies used in your role.
  
  
• Reference materials: Medical journals, paid subscriptions, and access to online databases that support ongoing medical knowledge.
  
  
• Uniforms and protective clothing: Medical scrubs, protective gear, lab coats, and related laundry expenses, only when specific to your work duties.
  
  
• Self-education expenses: CPD, training courses, and medical conferences that relate directly to maintaining or improving your medical skills or specialisation.
  
  
• Professional memberships and registration fees: Annual fees to the Australian Medical Association, AHPRA, and other professional associations connected to your practice.
  
  
• Professional indemnity insurance: A necessary cost for many doctors. This type of medical indemnity insurance is tax-deductible when it's tied directly to your work.
  
  
• Business costs (for private practices): This includes rent, electricity, phone and internet, wages for admin or nursing staff, medical equipment, and depreciation expense on large assets.
  
  
• Vehicle and travel deductions: If you travel between different job sites, clinics, or hospitals, or attend medical conferences, you may be able to claim car-related expenses or travel expenses. Just remember: commuting from home to a regular workplace isn’t deductible. Use either the logbook method or the cents per kilometre method and keep accurate records.
  
  
• Home office deductions: If you do telehealth, patient admin, or after-hours prep from home, you may be able to claim home office expenses. This can include a portion of electricity, internet, phone costs, and depreciation on work-related equipment. The method of claiming depends on whether you’re employed or self-employed.
  
  

Struggling to work out what you can and can’t claim? Skyways Brisbane accountants specialise in tax returns for medical professionals. From travel expenses to self-education and practice costs, our tax accountants for doctors ensure every claim is accurate and ATO-compliant. For expert support, call us today at 0400 348 482. 

What Doctors Can’t Claim for Tax Deductions

Not everything is deductible. The ATO rules out:

• Commuting costs: Travel from home to your regular work site.
  
  
• Personal clothing or grooming: Non-uniform items, even if you wear them to work.
  
  
• Meal expenses: Unless part of overnight travel.
  
  
• Fines and penalties: Parking, speeding, and any government-issued fines.
  
  
• Life or personal insurance: Income protection insurance is deductible, but life insurance isn’t.

Understanding what’s disallowed helps you avoid red flags during audits.

Tax Tips for Doctors

Smart tax planning goes beyond claiming deductions; it also comes down to timing and solid record-keeping. A few simple habits can help you reduce stress and improve your tax outcome.

1. Keep detailed records: Hold onto receipts, invoices, mileage logs, and notes to support every claim.
   
   
2. Store proof of payment: Always keep actual payment records, not just bank or credit card statements.
   
   
3. Use tracking tools: Apps like Expensify or spreadsheets help keep work-related expenses organised year-round.
   
   
4. Save documents for five years: This is the ATO requirement and protects you in case of an audit.
   
   
5. Prepay before 30 June: Paying for subscriptions, insurance, or course fees in advance can bring forward deductions.
   
   
6. Invest before the year ends: Buying equipment or paying for CPD before 30 June may improve this year’s tax position.
   
   
7. Review your structure regularly: The right setup (sole trader, company, or trust) can offer better tax benefits and income flexibility.
   
   
8. Speak to your accountant first: Before large purchases or changing your business setup, get advice tailored from trusted accountants for doctors.
   
   
9. Plan throughout the year: Don’t wait until tax time—spread your strategy across the financial year for the best result.
   
   

Maximise Deductions, Minimise Stress. Whether you’re an employed GP, self-employed locum, or practice owner, Skyways Brisbane accountants will help you uncover all legitimate tax deductions and avoid the ones that don’t apply. Let our experienced tax accountants for doctors take care of the details. Reach out now at 0400 348 482 for trusted advice.

FAQs

What tax deductions can I claim as a doctor?

You can claim work-related expenses like uniforms, medical equipment, CPD, insurance, travel, and home office costs.

Do doctors pay less tax?

Not by default. It depends on your income, deductions, and how your tax affairs are structured.

What are the main tax benefits for doctors in private practice?

Doctors in private practice can access tax benefits through claiming business expenses like rent, staff wages, equipment, and professional insurance, depending on their structure.

What is the most overlooked tax break?

Home office expenses and self-education costs are commonly missed, especially by doctors working outside standard clinical hours.

How do I claim my phone bill if I use it for both personal and work?

You need to calculate the work-use percentage and only claim that portion.

What makes tax returns for doctors more complex than other professions?

Tax returns for doctors often involve multiple income sources, varying work arrangements, and specialised deductions, which require careful reporting and structure.

Are medical journals and online subscriptions deductible?

Yes, if they relate directly to your role or maintaining your professional knowledge.

Can I claim meals during a normal hospital shift?

No, everyday meals during regular shifts aren’t considered tax-deductible.

Do I need a receipt for everything I claim?

Yes, proper receipts and records are required to support all claims, and they should be kept for at least five years.

Conclusion

Understanding what you can and can’t claim is key to getting your tax right as a medical professional. With so many moving parts, such as work-related expenses, travel, home office, and different income streams, it pays to have expert guidance.  The right advice can mean a better return, fewer mistakes, and less stress at tax time.

At Skyways Accountants, our experienced Brisbane tax accountants work closely with doctors, locums, and medical practice owners to ensure every deduction is backed by strategy and compliance. If you want peace of mind and better results, call us today at 0400 348 482 to book a consultation.