As an independent contractor doctor your entitlements and obligations will differ from that of an employee. Generally, the employment relationship is more heavily regulated than a contractor relationship.
Independent contractors are paid for the results they achieve and are personally responsible if their business makes a profit or loss. They are usually engaged for a specific task and invoice the client when the task is completed. There are quite a few differences between doctors who are employed versus doctors who are on a contract. Read on to find out these differences, as well as what you need to know about working as a contractor doctor in Australia.
Many GPs are engaged as independent contractors especially in private practice. They may pay a facility fee in return for office facilities and administrative support in a clinic or health centre. Such independent doctors typically set up under a sole trader business structure and run their own business. Independent contractors require an ABN for billing purposes which can be obtained for free at any time through the Australian Business Register website. An ABN is necessary to avoid Pay as You Go tax being withheld on payments.
Independent contractors who expect to earn over $75k per annum – which most physicians do – should register for GST (Goods and Services Tax). Even though the provision of medical services to patients covered by Medicare is GST free, registering for GST will allow independent physicians to claim any GST on expenses. A sole trader or business registered for GST must submit regular Business Activity Statements (BAS) to the Australian Tax Office (ATO).
When working as an independent contractor doctor you will most likely be required to submit invoices to the practice or hospital you are working in on an agreed basis, e.g. fortnightly or monthly. Sometimes the health service will provide a template for doctors to use. You may also be required to take out certain types of insurance and pay your own superannuation, although in some circumstances you may be entitled to superannuation entitlements.
It is important to note that you can be an independent contractor for some work and an employee for other work, depending on the specific contracts with each organisation. Also note that independent contractors are classified differently according to the state or territory you are working in so before commencing work as a contractor, check any relevant laws. Because tax laws in Australia are complex, it is helpful for independent contractors to seek advice directly from the Australian Taxation Office.
HealthStaff Recruitment connects doctors and GPs with Australia’s leading hospitals, practices and centres. If you are interested in working as a doctor in Australia, check out our job vacancies.