When does the Australian tax year run from/to?

Unlike most other countries, Australia’s tax year runs from 1 July to 30 June.

Do I have to do a tax return?

For all of you travelling doctors working in Australia….yes. You would be mad not to with most refunds being $1,000AUD and greater.

What if it is not the end of the Australian tax year and I’m leaving, can I still do a tax return?

Yes, we can assist you in preparing your tax return even once you have left the country….we just need to wait until 1 July. Contact us and we will let you know the process.

If I leave part way through a financial year (well before the 30th June ) can I do my last tax return just prior to my departure?

In our experience, it is not wise to try and lodge an “early” tax return. We have seen employers (hospitals) change and alter final pay as you go summaries at the end of the financial year. We do not offer this service.

Can I do the return myself?

Yes absolutely, although we have found that the majority of travelling doctors who work in Australia prefer to use our service because the process of reclaiming tax in Australia is extremely complicated and time consuming. Additionally, as specialists in travelling doctor taxation, we normally have the ability to reclaim a higher refund amount. For the 2024 financial year we completed over a dozen “amended” tax returns of travelling doctors who had done their 2024 returns themselves and got it badly wrong, thus requiring us to effectively do the return again (amended).

Am I a Tax resident of Australia?

If your behavior in Australia reflects a degree of continuity, routine or habit consistent with residency (for 6 mths or more), you maybe taxed as an Australian resident. Examples include being a member of a medical board, having an Australian bank account and working in the same hospital for a lengthy period. This does not mean however, you are classed as a resident for immigration purposes.

Is the criteria for tax residency the same as for the Department of Immigration residency?

No. Tax residency is based on different criteria than that of the Department of Immigration. You should contact the Department of Immigration directly with any queries regarding your actual residency status.

What’s the benefit of being a tax resident of Australia?

The benefit is the Tax Free Threshold. This is the annual amount of tax free income that “tax residents” are entitled to. For a full tax year, tax residents are currently entitled to $18,200 tax free and then 19% on the next $18,800. If you become a tax resident part way through a tax year, you will be entitled to an apportioned tax free threshold. For example, if you are a tax resident for 6 months of the tax year, you would be entitled to a tax free threshold of $9,100 for that year (i.e. 6/12 * $18,000). Non-residents are taxed at 32.5% of the first $80,000 they earn.

I’ve heard about PAYG Payment Summaries /Group Certificates, what’s this all about?

This will show the total amount of income you earned from that employer, how much tax was deducted and the period of employment. When you stop work, ask your employer for a payment summary.

Note: You will need to supply us with payment summaries from all the places that you worked at between the 1st July to 30th June in order for us to lodge your tax return.

What about any overseas income I earn whilst I’m in Australia?

If you are a tax resident of Australia, you will need to declare all worldwide income earned during our tax year (i.e. interest, rent, or dividends from investments). However as of 2007, your actual employment income earned prior to your arrival here will not need to be declared.

Tax non-residents are not required to declare any of their overseas income in Australia.

Who is preparing and lodging my tax return?

We are. Doctor Tax Pty Ltd is a registered tax agent (Tax Agent Number – 73945004).

What is your Fee?

Pay by credit card or direct bank transfer for $200 for a standard return (conditions apply).
Rental Property tax returns from $250.
Business tax returns starting from $250.

Note: For those staying for more than one tax year, our fee is actually claimable as a deduction in the following year and it is estimated that you will actually get about a 34% of our fee back through your tax refund.

Am I responsible for my tax return?

When a taxpayer signs their tax return, they are taking responsibility for the claims they are making. The ATO assumes the taxpayer has completed their tax return in good faith. If a taxpayer becomes aware that their tax return is incorrect, they must contact the ATO as soon as possible to correct the error.

Even if someone else – including a registered tax agent – helps a taxpayer prepare their tax return, the taxpayer is still legally responsible for the accuracy of the information.

How long should I keep my tax records for?

You must keep all the records you used to assist in the preparation of your tax return. If you are claiming deductions, you must keep written evidence to prove claims for those deductions. Keep your records for 5 years from when your tax return is lodged. You may be eligible for a 2-year shorter period of review. The Tax Office will notify you on your notice of assessment if you qualify for the shorter period of review.

How much will my tax refund be worth?

If you are entitled to a tax refund, the size of your refund will depend on the amount of income you earned in the tax year and the amount of tax withheld by your employers over this period. For many travelling doctors out here for less than 12 months, a typical refund can be $1,000 and higher. As specialists in Travelling Doctors tax refunds, we guarantee to organize the largest legally possible refund for you.

Why does my friend have a much higher refund than me and yet we have the same deductions claimed?

We get this question a lot! This is common and can be due to a number of things:

It can come down to how much tax the actual hospital has taken out throughout a year. For all you guys it is like a lottery really. So although your refund may end up lower than others all that means is you have received more in the hand than those others(on same salary and deductions) over the last 12mths.

Many doctors who start in late August and September are taxed as if their income will be for 12months and thus get much bigger refunds than those who work a full year(or nearly a full year). This is the same for those who leave in say April or May, they too get bigger refunds. Basically the less you work in a financial year the bigger the refund. However, by working a full year your tax taken out by the hospital will be nearly spot on to what it should be thus you are relying solely on the deductions in your return to boost your refund. Thus full year returns are usually low refunds, especially if deductions are low.

Please also realise that a refund is a reconciliation of your tax for the year. So if people get big refunds that tells you that they have paid way too much tax during the year itself(thus less money in their hand from each pay). The net result for everyone is the same after the return is done, its just some get more in their hand during the year and then less refund or some get less in the hand during the year and a big refund.

How long will it take to get my tax refund?

Between 7 to 14 days after completion of the return. However, if its necessary for you to lodge a return outside the ATO’s normal processing time (which is the 1 July to 31 Oct), it can sometimes take up to 6 -8 weeks.

I worked in Australia several years ago, can I get my tax back?

Definitely, just contact us to get the process started.

I prepared the return myself /another accountant prepared the return and I think it is wrong….what can I do?

We will be happy to assess the return to see if it is wrong and let you know if an amended return should be lodged. Please contact us to know more.

What is a tax deduction and what will I be able to claim?

Tax deductions are expenses that you have paid that can be used to reduce the level of income you have earned in a tax year. This has the affect of reducing the amount of tax you pay. You can claim deductions for work-related expenses you incurred while performing your job. You incur a work-related expense when:

You receive a bill or invoice for an expense that you are liable for and must pay.

You do not receive a bill or invoice but you are charged and you pay for it.

It should be noted that the GST is part of the total expense and is therefore part of any deduction.

The Australian Tax Office do not require written evidence of any deduction claims that TOTAL AUD$300 or less. However, for any deductions greater than AUD$300 written evidence (in the form of receipts) must be held from the first dollar of deductions claimed (apart form motor vehicle mileage claims).

Are student loans claimable?

Generally no, but please contact us to discuss further.

The Motor Vehicle claim sounds complicated, how do we work it out?

It is definitely complicated, so sit down and soak this up. For travelling doctors the best method to make a claim is based on the kms travelled not the costs incurred.

You can not claim the trips between home and your normal base of work (the hospital) as that travel is private. For some of you your normal base of work may actually be two hospitals under the same employment setup. Trips from home to either of these hospitals are not claimable.

However, you can claim the kms to travel:
From your base of work to an alternative place for work or study and then back to your workplace or directly home. Eg: if you are at work and then have to drive to another hospital and then back again or to home…then all these kms need to be recorded.

From your home to an alternative place for work or study and then back to your workplace or directly home. Eg: if you are at home and then have to drive to the medical board offices and then to work or to home…then all these kms need to be recorded.

From your base of work to another base of work and then back to your original base or directly home. Eg: if you are at work and then have to drive to your other base hospital and then back again or to home…then all these kms need to be recorded.

Basically, if you do any driving for work or study purposes that is not to and from home to your base of work then the kms are claimable under the above guidelines. The good thing about this method of claiming is that you do not need written evidence and is based on a set rate for each km. All you need is a reasonable estimate of your kms. Eg: Went from home out to a different hospital than usual and then went to my usual hospital. That’s about 45kms all up. These trips should all be added up and then enter the total kms in the online tax return. We will work out your deduction based on rates determined by the engine capacity of your car.

What is the Medicare Levy?

The Medicare Levy is an additional tax paid by most residents of Australia. Income raised from the levy is used to pay for health services. The levy is calculated as a percentage (2.0%) of your taxable income. You will not have to pay the levy if your taxable income is below the Medicare levy threshold (currently $32,500).

Non tax residents for tax purposes are not required to pay the Medicare levy. However, where a visitor is considered to be residing in Australia and is therefore a resident for tax purposes, they will be liable for the Medicare levy.

Do I have to pay the Medicare Levy Surcharge?

If you earn over $97,000 (as an individual) or $194,000 (as a couple) in salary and reportable fringe benefits(this could be up to $17,000) in the period between 1st July and 30th June and you don’t have any Australian Private Hospital insurance cover then you will be charged at least an extra 1% (to the usual 2.0% levy) of your taxable income for a Medicare levy surcharge. It maybe worthwhile to get Australian Private health insurance with hospital coverage if you believe you will earn over these amounts as you will be charged upwards of $970 in surcharge (1% of $97,000) in your tax return.

Am I able to be exempt from the Medicare Levy?

You are entitled to basic medicare and you have to pay the MEDICARE levy if you are on a business 482/407/494/186 visa and were a resident of the United Kingdom, the Republic of Ireland, Italy, Malta, Sweden, the Netherlands, Finland, Belgium, New Zealand, Norway or Slovenia before entering Australia. However, if you are not from one of these countries on your visa, then you are not entitled to Medicare which means you are exempt(on application) to pay the medicare levy in your tax. The catch is though you need to apply for the medicare exemption. Please contact us to find out more.

Private Health insurance, what is it all about?

This is probably the most often thing we are asked year in year out and its probably the most complicated thing to explain to a Doctor out here travelling and working. So here it is:

THE ISSUE AND WHAT’S IT GOT TO DO WITH YOUR TAX

Everyone working in Australia that earns over $21,335 in a financial year has to pay a Medicare Levy of 2%, this is taken out of your pay automatically. There is no getting away from this or around it. However if you earn over $97,000 (or $194,000 as a couple) in a financial year then you may have to pay the Medicare Levy SURCHARGE of 1-1.5% of your income. This is not taken out of your pay and you have to pay it in your tax return. So on a salary of $100,000 you could have a tax bill at tax time of $1,000(1%) due to the surcharge.

The only way you dont have to pay this is if you get Private Health insurance coverage with Hospital benefits. If you have this in place then the surcharge does not apply. Please be aware that the surcharge is pro rated, so that if you were to get insurance 6 months into a financial year, you would still pay the surcharge for the 6months missed of the financial year that you weren’t covered. So a great time to get the cover is just prior to a new tax year (say in April to June) so that you get the next financial year fully covered.

IF YOU ARE ON A BUSINESS 482/407/494/186 VISA

If you are on a visa and not a permanent resident, this is where it gets super weird. If you have overseas private health insurance(IMAN,etc) this will give you cover in Australia but it WILL NOT stop you from paying the surcharge.

If you get private health cover in Australia you have to make sure it is designed for you to be able to actually use and also stop the surcharge. Many of the covers in Australia for 482/407/494/186 visa holders we see do one and not the other. One cover we are aware of that works is Bupa’s Working Visitors Cover with the Reciprocal Cover option also selected. However, there are many other options out there.

IN SUMMARY

If you have become a permanent resident and earn over $97,000 (or $194,000 as a couple) then getting private cover with hospital benefits is a no brainer…you will have cover and have more $$$ in your pocket as the cover is usually less than the surcharge (for young people without kids that is).

If you are on a visa, then even though the practicalities of Aussie cover are messy, it could still save you a few hundred dollars a year, so maybe worth the trouble. Especially if you intend on becoming a permanent resident.

What is Salary packaging and should I do it?

‘Salary Packaging’ refers to the process whereby the hospital will allow an employee to exchange a portion of salary for non-cash benefits. Employees normally undertake salary packaging arrangements in order to increase their after tax NET income. This is achieved as the non-cash benefits are not taxed, whereas obviously your usual salary is.

Simply, you will be able to package benefits up to a value of between $7,000 and $9,000 (depending on the hospital and applicable tax year)1. Some of the benefits you can package include:

Home mortgage repayments
Rent
Personal credit card expenses
Car expenses (e.g., repairs, registration and insurance)
Self-education expenses (e.g., text books, stationary, course fees, etc)
Telephone expenses (e.g., home or mobile phone)
Travel expenses (e.g., airline tickets, accommodation, etc)

For salaries above $37,000 per annum, the usual savings to your disposable income is roughly about $3,000- $4,000. For salaries below this, your savings may only be as high as $1,000-$1,500. Packaging can be quite a difficult concept to grab a handle of, but one that the majority of overseas trained doctors should definitely look at doing.

The limit on the packaged benefits applies to the 12months from 1st April through to 31st March.
1 The government has allowed hospitals to provide packaged benefits up to a ceiling of $17,000. However, after fringe benefits tax this equates to a taxable value of packaged benefits of between $7,000 and $9,000.