Locum Work as a Junior Doctor: Tax, ABN, GST & What You Actually Take Home

What junior doctors need to know about locum rates, tax set-asides, GST, salary packaging and HECS before taking a first shift

Locum comes from the Latin locum tenens — "one who holds a place." In medicine, a locum is a doctor who temporarily fills a position at a hospital or clinic, covering gaps in the roster rather than holding a permanent role.

Locum work at a glance

• What it is: temporary work outside your base employer, usually picked up as extra shifts through an agency or directly with a hospital.
• Pay pattern: hourly rates are often materially higher than ordinary salaried hospital work, especially for residents, registrars and after-hours cover.
• Best for: PGY2+ doctors who want flexible extra income and can handle contractor-style admin without destabilising their cash flow.
• Main trade-off: if you are paid on an ABN, tax, HECS, super, GST tracking and admin move onto you.
• Reality check: the net win is smaller once lost leave, salary packaging and employer super are factored in.

Indicative pay context

Think in hourly rate versus full package: locum work often wins on raw hourly cash, while salaried hospital work keeps payroll withholding, employer super, paid leave and, where relevant, salary packaging.

For junior doctors, locum work typically means picking up shifts at hospitals outside your base employer — weekend ED cover, interstate relief, after-hours fills — either directly or through a locum agency. It's one of the most common ways residents and registrars supplement their income, build experience across different environments, and maintain flexibility during training.

How do you actually get started? The two main routes are locum agencies (the most common) and direct arrangements with hospitals you already know. Demand is strongest where rostering gaps are hardest to fill, especially in emergency medicine, general medicine, and rural or regional cover. Registrars with procedural or emergency experience are often especially sought after.

This page is about what happens to your money when you locum: tax, ABN, GST, packaging and super. The trap is not that locum income is taxed more than your hospital salary, but that it is taxed differently.

Is locum work worth it?

Usually, locum work makes the most sense when the hourly rate premium is real and you can handle contractor-style admin without destabilising your cash flow, leave position or base-hospital arrangements.

Why people do it, and what they underestimate

Who can do locum work, and how does payment work?

You need full (general) AHPRA registration — meaning you need to have completed your intern year (PGY1) and hold general registration. Provisional registrants cannot work as independent locums. If you're still an intern, this page is useful reading for later, but none of the ABN pathway applies to you yet.

Once you have general registration — typically from PGY2 onwards — you're eligible. Some public hospitals also have facility-specific credentialling processes on top of AHPRA registration, so confirm the requirements before agreeing to a shift.

The structure of how you are paid is the second thing to understand early, because it determines your entire tax experience.

Do I need an ABN if I'm working through a locum agency?

Not necessarily — it depends on how the agency pays you. Many agencies pay junior doctors as ABN contractors, meaning you invoice the agency and receive the full amount untaxed. However, some agencies employ doctors as PAYG casual employees, handling tax withholding themselves. The distinction matters enormously. Before you start, ask the agency explicitly: "Will I be paid as an ABN contractor or as a PAYG employee?" If the answer is ABN, you need one registered before your first invoice. If PAYG, you don't — but you still lose salary packaging and the hospital doesn't pay super.

Most junior doctors starting out assume they'll be treated like a PAYG casual employee. In practice, the majority of agency-arranged junior locum work is ABN-based. The moment you're on an ABN, you've become a business. That changes when and how you pay tax, what happens to your packaging, and who is responsible for your super.

ABN contractor vs. PAYG employee: the financial difference in practice

The clearest way to understand this is to compare what happens to $1,000 of locum earnings under each arrangement.

Under a PAYG employee structure, the hospital or agency withholds roughly $370 in tax and remits it to the ATO on your behalf. You receive ~$630. Your HECS repayment is also estimated and withheld through the year. You're not particularly exposed at tax time — it behaves like your regular hospital pay.

Under an ABN contractor structure, you receive the full $1,000. It's your job to set aside ~$370–$420 of that and not touch it. At tax time, it all reconciles — but if you've spent it, you now owe the ATO money you don't have.

There's also a critical GST misconception to clear up early. Medical services billed directly to patients are generally GST-free. But locum services billed to a hospital or agency are usually not — you are providing a labour service to the facility, not directly treating a patient. The GST status depends on the specific arrangement, and the ATO's position on this has caught out a significant number of junior doctors. Verify with a medical accountant before you issue your first invoice.

Tax: what you actually owe and when

How much income tax will I owe on locum earnings?

Locum ABN income doesn't get its own tax-free threshold. It piles on top of everything else you earned that year. For most residents earning $95,000–$110,000 as a base salary, that means the first dollar of locum income is already taxed at 30 cents plus the 2% Medicare levy — and enough locum work can push your total past $135,000, where the 37% bracket starts.

Worked example: A QLD resident earning $97,036 base salary picks up $30,000 in weekend locum shifts over a financial year. Total assessable income: $127,036. The locum income is taxed at 30 cents in the dollar plus the 2% Medicare levy — a combined rate of 32% (rising to 39% on any dollars past $135,000). Set-aside: roughly $9,600 on those $30,000 of locum earnings — more if the shifts push you over $135,000. The $30k that looked good as a fortnightly top-up is, after tax, closer to $20,400 take-home.

The exact figure depends on your base salary, your HECS balance, and whether you're making super contributions. Before you commit to a shift pattern, model your combined income — use the AussieClinicians calculator with your state, grade, and expected overtime to get your base salary right first, then factor in the locum income on top.

What are PAYG instalments, and why do they appear after my first locum year?

After you lodge your first tax return including ABN income, the ATO may automatically enrol you in quarterly tax prepayments for the following financial year. This catches almost every first-time locum off guard.

It is not extra tax. The total tax you owe is exactly the same. The difference is that the ATO now collects it in four quarterly instalments instead of a single annual assessment. The first instalment notice — typically for thousands of dollars — arrives in October and feels like a penalty. It isn't. It's just the timing changing.

The trigger is based on the amount of tax payable on your business and investment income in your most recent return. Exact thresholds should be confirmed at ato.gov.au — they are updated and not fixed figures. The practical implication: once you've lodged a return with ABN income, budget as if every locum payment already has ~38% quarantined before you decide what to spend.

Why does my HECS repayment spike at tax time when I locum?

HECS repayments apply to your total repayment income — hospital salary plus locum ABN earnings combined. The ATO uses a marginal system (introduced in 2025–26): for 2026–27, repayments are calculated only on income above the $69,528 threshold, at 15 cents per dollar from $69,529 to $129,717, then at higher marginal rates above that (verify current thresholds at ato.gov.au).

Here's the trap: your hospital payroll withholds HECS throughout the year based on your salary alone. The locum income has no HECS withheld. When your full income is assessed at tax time, the higher repayment — calculated on the combined total — arrives as a single amount owing.

Worked example: Resident with $80,000 HECS balance, base salary $97,036. During the year, HECS withheld through payroll: approximately $4,126 (15% × ($97,036 − $69,528)). They add $30,000 locum income. Total repayment income: $127,036. Total HECS obligation: 15% × ($127,036 − $69,528) = $8,626. Shortfall: ~$4,500 owed at tax time, with no forewarning on the locum side.

For the full picture of how salary packaging interacts with HECS repayment income — and it does, in a way that surprises most people — see the HECS/HELP guide.

GST: the $75,000 threshold and why it's not per hospital

You must register for GST when your ABN income — across all locum work combined, not per hospital — exceeds $75,000 in any 12-month rolling period. Once registered, you add 10% GST to your invoices and remit that amount to the ATO each quarter via a Business Activity Statement (BAS). The current threshold and rules are at ato.gov.au.

A registrar picking up weekend ICU shifts at three different hospitals — $20,000 each — has an ABN income of $60,000 from no single hospital over $20k, but a combined total of $60k. A fourth hospital's shifts push them over $75,000 for the rolling year. GST registration is now required.

The consequence of crossing the threshold without registering is severe and immediate: the ATO can require you to pay 10% GST retrospectively. Because you didn't add GST to your invoices at the time, you can't go back to the hospital and request it. You absorb it from your own pocket. On $30,000 of unregistered locum income, that's $3,000 gone.

A few other points worth knowing:

• Even if you're under the $75,000 threshold, voluntary GST registration lets you claim GST credits on legitimate business expenses (accounting fees, clinical equipment, professional apps). Worth discussing with an accountant.
• The BAS lodgement process is quarterly. For the first few, use a medical accountant — the penalty for a late or incorrect BAS is not small.
• Some locum arrangements are structured differently, and GST-free treatment may apply in specific circumstances. Do not assume either way — confirm with an accountant before invoicing.

Salary packaging: this is the part most people don't expect

The $9,010 living expenses cap and the $2,650 meal and entertainment cap are not your entitlement as a doctor — they're your entitlement as an employee of an eligible public or not-for-profit employer. The packaging flows through your hospital's payroll. It does not follow your ABN.

If you go full-time locum with no base hospital role: no packaging. None. The caps disappear entirely.

If you hold a base hospital role and locum on the side: packaging still applies to your hospital salary. Your ABN locum income sits outside it entirely — that income is pre-tax with no packaging benefit.

The trap people miss is around FTE. If you reduce your hospital contract from 1.0 FTE to 0.6 FTE to free up time for more lucrative locum shifts, your packaging cap is now applied to a lower salary base. More importantly, if you drop FTE partway through the FBT year (which runs 1 April to 31 March), any unused cap from the first part of the year is permanently gone. You cannot carry it forward or compensate with later months.

Before you make that call, model whether the additional locum income actually offsets the lost packaging value in net terms. The salary packaging guide has a worked example of what that calculation looks like.

Superannuation: now your problem

As an ABN contractor, the hospital or agency has no obligation to pay super on your behalf. The Superannuation Guarantee applies to employees — standard locum arrangements fall outside it.

There is one exception worth knowing: if your contract is predominantly for your personal labour and meets certain ATO tests for being employee-like, employer SG obligations can apply. This is the exception in standard junior doctor locum arrangements, not the rule — but if your setup is unusual, confirm it with an accountant.

The practical question is: what do you do about super yourself?

You can make personal concessional super contributions from your locum earnings. These are tax-deductible up to the annual concessional cap ($30,000 for 2025–26, which includes any employer contributions from your hospital salary — verify the current cap at ato.gov.au). To claim the deduction, you must lodge a Notice of Intent to Claim with your super fund before you lodge your tax return. Do this in the last few days of June or early July — not retroactively.

At the 37% marginal rate, every $10,000 you contribute to super from locum earnings instead of taking as personal income saves you approximately $3,700 in tax. That's not financial advice — it's the arithmetic of concessional contributions. Whether and how much to contribute is worth discussing with a medical accountant before the end of the financial year.

What to set aside: a practical framework

These are rough guides. Your exact figure depends on your base salary, HECS balance, and whether you're making personal super contributions. Use the AussieClinicians calculator to model your combined income before committing to a regular shift pattern.

Tax deductions available to you as an ABN locum

Working on an ABN opens up deductions that employed doctors can't claim. The following are generally deductible where they're directly related to your current work — not future specialisation, not personal:

• AHPRA registration fee
• MDO/malpractice insurance premium (proportion attributable to locum work)
• College and society memberships required for your current role
• CPD costs for your current practice area
• Accounting and BAS preparation fees
• Proportionate share of phone and internet costs used for work
• Clinical equipment: stethoscope, diagnostic tools, relevant apps (UpToDate, etc.)
• Personal concessional super contributions (with Notice of Intent lodged)

The deduction that most locums try to claim and shouldn't: travel costs to interstate locum placements. The ATO's position is that travel from home to a place of work — even if it's in another state — is generally a personal expense, not a work-related deduction. This is an audit focus area. If you believe your specific situation is different, get written advice from a registered tax agent before claiming.

Indicative locum rates

For context, not as a guarantee. Rates vary meaningfully by state, specialty, urgency, time of day, and whether the placement is agency-arranged or direct.

• Resident/RMO: approximately $85–$150/hour for standard shifts; urgent fills and after-hours work typically higher
• Registrar: approximately $115–$200+/hour depending on specialty and demand

The gap between what looks attractive on paper and what you net after tax and set-asides is where most first-time locums get their expectations recalibrated. A $130/hour weekend shift that pushes your marginal rate to 39% nets you closer to $79/hour effective take-home, before HECS.

How to get started with locum work

The admin is usually heavier than first-time locums expect. The goal is to sort out eligibility, payment structure and cash-flow setup before the first shift or invoice goes out.

1. Confirm registration and eligibility — general AHPRA registration, not provisional
2. Confirm your pathway and payment structure — agency-arranged or direct with a hospital, and whether you will be paid as ABN or PAYG
3. Register for an ABN if needed at abr.gov.au
4. Prepare your insurance and credentialling paperwork — confirm your MDO policy covers the facility type and complete the hospital's credentialling requirements
5. Set up your money workflow before the first payment — open a dedicated tax/GST account and move your set-aside after every payment
6. Sort the tax and super admin early — speak to a medical accountant before your first BAS, invoice or tax return catches you off guard
7. Recheck the trade-offs if locum work starts replacing your base job — employer super, paid leave, salary packaging and contractor-style cover all change

FAQs

Disclaimer: This page is general educational information only. Tax rules, GST thresholds, HECS repayment rates, and superannuation caps change annually. Verify all figures with the ATO (ato.gov.au) and consult a registered tax agent or medical accountant before acting. AussieClinicians is an independent site built by Jacob Stretton (RN; final-year medical student). Not financial or tax advice.

Sources: ATO — Sole traders · ATO — GST registration · ATO — PAYG instalments · ATO — HECS/HELP repayment thresholds 2026–27 · ATO — Concessional contributions · ABR — Register an ABN · AHPRA — Registration types