Tax Deductions for Doctors

Doctors in Australia are among the highest earners, which often means dealing with higher marginal tax rates. But here’s some good news—medical professionals can access a wide range of tax deductions to help lower their taxable income.

Unfortunately, many doctors miss out simply because they’re unaware of what they can claim. Let’s explore some of the top deductions you might be eligible for:

1. Self-Education Expenses

Ongoing education is often essential to maintain medical qualifications. The good news? The Australian Taxation Office (ATO) recognizes these as work-related expenses. This means you can claim costs like course fees and materials as deductions—but only if the course directly relates to your current job.

2. Motor Vehicle Travel 

If you drive between work locations during the same day—like from your clinic to a hospital for a procedure—you can claim expenses for that travel. This includes fuel, parking, and tolls. However, trips between home and your workplace usually aren’t deductible unless you’re transporting bulky equipment that can’t be stored at work.  

The first method for claiming work related motor vehicle travel is the cents per km method. The second method is the logbook method. In order to claim your work related motor vehicle expenses using the logbook method you  must keep a logbook and odometer readings for a ‘logbook period’ of  12  weeks.  You can claim fuel and oil costs based on actual receipts. Click here to see which method is most appropraite for you.

 3. Professional Fees and Subscriptions

Memberships with medical associations, such as the Australian Medical Association, and costs for renewing registrations or practising certificates are deductible. You can also claim subscriptions to medical journals and publications that keep you informed about advancements in your field.

4. Uniform and Protective Clothing

If you’re required to wear a specific uniform or protective clothing, such as lab coats or surgical caps, you can claim costs for buying, cleaning, or repairing them. But everyday clothing, even if worn at work, isn’t deductible—for instance, jeans paired with your coat won’t count.

5. Travel Expenses

Travel for work-related purposes, such as conferences or remote assignments, can also be claimed. Expenses like flights, accommodation, and conference materials qualify if the trip is for work. However, combining  personal travel a work event with such as attending a conference will mean an apportionment of costs. Check out our blog on How to Claim Overseas Travel as a Tax Deduction.

6. Insurance Costs

Medical professionals can claim deductions for income protection insurance and professional indemnity insurance. These policies are vital for safeguarding your career and income and are considered tax-deductible.

7. Equipment and Supplies

Work-related equipment, such as stethoscopes, briefcases for patient files, or other necessary tools, can be claimed as deductions.

8. Phone Expenses

If you use your personal phone for work, you can claim the work-related portion of your phone bills. Keep records to show the percentage of usage related to your job, especially if your employer doesn’t cover these costs.

9. Home Office Costs

Many doctors who work remotely or handle admin tasks from home can claim home office expenses. This includes costs like lighting, heating, internet, and depreciation of office furniture or equipment, such as chairs or computers and your professional library.  To maximise your claims you should  base your claims on your actual bills multiplied by your home office floor space,  The alternative method, would be to use the ATO's standard hourly rate of  $0.67 cents per work hour which covers:

• Energy expenses (electricity and gas)
• Phone usage (mobile and home)
• Internet
• Stationery and computer consumables

No additional deduction for any expenses covered by the rate can be claimed if you use this method.  

10. Salary Packaging 

Medical professionals and people working in the hospital system have a great opportunity to save money through salary sacrifice arrangements.

 When an employee and their employer reach an agreement, the employee agrees to receive a lower amount of after-tax income. In return, the employer covers certain benefits using the employee's pre-tax salary.

Some of the most common items that can be included in salary packaging are superannuation and car benefits, like a novated lease. These options are typically available to most employees, depending on their agreement with their employers.

But that's not all! Medical professionals and people working in public and not-for-profit hospitals have even more flexibility. They can also include living expenses and meal entertainment expenses in their salary packaging arrangements.  Click here for more details.

Key Takeaways:

Doctors can claim a variety of work-related deductions to reduce their taxable income, but you’ll need to meet a few conditions:

• You must have personally incurred the expense.
• The expense should directly relate to your work duties.
• You’ll need to keep accurate records, like receipts or invoices, to back up your claims.
• Distinguishing between personal and work-related portions of expenses, especially for things like vehicles or phones, is essential.

And don't forget,  the cost of preparing your tax return is tax deductible if you use a registered tax agent. 

If you’re unsure where to start,  we can help you maximize your deductions and ensure your tax return is accurate. Remember to keep documentation for all your claims—no proof means no deduction!

Chris Tolevsky has over 30 years experience in the medical and allied health fields.  He provides expert guidance on tax strategies, building and protecting wealth . If you’re interested in discussing how we can help you please book a complimentary consultation. 

Disclaimer: This article contains general information only . It is not designed to be a substitute for professional advice and does not take into account your individual circumstances, so please check with us before implementing this strategy to make sure it is suitable