Guide · Private work
Private income: ABN, GST and personal services income
Private billing, locum contracts and VMO work can bring rules that a hospital salary doesn’t: an ABN, GST, the personal services income rules and quarterly tax instalments. This page sets out what the ATO and the Australian Business Register say. Whether a rule applies to you depends on your contracts.
ABN
The Australian Business Register says you’re entitled to an ABN if you’re carrying on or starting an enterprise in Australia. It also says: “You’re not entitled to an ABN for work that you carry out as an employee … even if you or your employer calls it contracting.” A hospital salary paid through payroll is employment income.
GST: the registration threshold
$75,000GST turnover — ATO, Registering for GST (updated 14 Sep 2026) ↗
The ATO says: “You must register for GST when your GST turnover is $75,000 or more, current or projected. You have 21 days to register once you’re required to.”
“GST turnover is total business income (not profit), minus GST on your sales, input-taxed sales, and a few other listed items.”
Plain-words note. The ATO’s list of things to leave out doesn’t include GST-free sales, so GST-free medical fees still count towards the $75,000.
Below the threshold, registering is optional. If you choose to register, you generally must stay registered for at least 12 months, and you lodge a business activity statement (BAS).
GST: which medical income is GST-free
The ATO says a medical service is GST-free if a Medicare benefit is payable for it, or if it’s supplied by or on behalf of a medical practitioner and is generally accepted in the profession as necessary for the patient’s appropriate treatment.
Not GST-free, on the ATO’s examples:
- Cosmetic procedures with no Medicare benefit payable (the ATO’s example is tattoo removal).
- A service or report supplied to a business rather than the patient, when no Medicare benefit is payable (the ATO’s examples are a progress report to an insurer and a medico-legal examination and report requested by lawyers).
ATO, GST and health: Medical services (updated 12 Jun 2024) ↗
GST: you, the clinic and the service fee
The ATO says the GST result depends on who contracts whom, and that the contract should say so clearly:
- If the clinic contracts the practitioner to provide services to the clinic’s patient, the practitioner’s supply to the clinic is not usually GST-free. The clinic’s supply to the patient can be GST-free.
- If the practitioner contracts the clinic for rooms and administration, the clinic’s supply of rooms and administration to the practitioner is not GST-free. The practitioner’s supply to the patient can be GST-free.
ATO, GST and health: Recipient of the supply (updated 12 Jun 2024) ↗
Personal services income (PSI)
PSI is income produced mainly (more than 50%) from your personal skills or efforts.
ATO, Income that is PSI (updated 26 Feb 2026) ↗
If the PSI rules apply, they change how you report that income and which deductions you can claim.
ATO, What to do when the PSI rules apply ↗
The rules don’t apply if you are a personal services business (PSB). The ATO says you can self-assess as a PSB if you either:
- Meet the results test for at least 75% of your PSI, or
- Meet one of the other tests (unrelated clients, employment, or business premises) and less than 80% of your PSI comes from one client and its associates (the 80% rule).
ATO, Self-assessing as a PSB (updated 23 Nov 2022) ↗
Results test met for at least 75% of the PSI?
Yes → personal services business.
Otherwise
One of the other tests passed, and less than 80% of the PSI comes from one client and its associates?
Yes → personal services business.
Otherwise
The PSI rules apply, or a PSB determination may be applied for.
Results test
The ATO’s results test has all three of these conditions:
- Paid to produce a specific result.
- You provide the equipment or tools needed (if any).
- You’re liable to fix mistakes at your own cost.
The ATO says: “If you’re paid on an hourly basis or daily rate … it’s unlikely that you will meet the first condition.”
ATO, Results test (updated 23 Nov 2022) ↗
The other tests
If you can’t self-assess, you may be able to apply to the ATO for a PSB determination.
Tax isn’t withheld: PAYG instalments
With private income, no tax is usually taken out when you’re paid. The ATO automatically enters an individual into PAYG instalments if all of these apply: instalment income of $4,000 or more on the latest return, tax payable of $1,000 or more on the latest notice of assessment, and notional tax of $500 or more. Most people pay quarterly. You can also enter voluntarily.
ATO, Starting PAYG instalments (updated 17 Dec 2024) ↗
Tax on salary plus private income → The private work field is on that page.
Two 2026–27 details
The $1,000 standard deduction applies to salary and wages, not business income. If you only earn business income, it doesn’t apply.
ATO, Standard deduction (updated 14 Sep 2026) ↗
No employer super comes with an invoice. Personal concessional contributions count towards the same $32,500 cap.
Related on this site
Included / Not included
Included
- ABN entitlement, including the employee rule — Australian Business Register ↗
- The $75,000 GST registration threshold and the GST turnover definition — ATO, updated 14 Sep 2026 ↗
- When medical services are GST-free — ATO, Medical services, updated 12 Jun 2024 ↗
- The ATO’s clinic and service fee examples — ATO, Recipient of the supply, updated 12 Jun 2024 ↗
- PSI definition — ATO, Income that is PSI, updated 26 Feb 2026 ↗
- PSB self-assessment, the results test and the 80% rule — ATO, Self-assessing as a PSB, updated 23 Nov 2022 ↗
- The results test, all three conditions — ATO, Results test, updated 23 Nov 2022 ↗
- PAYG instalment entry thresholds — ATO, Starting PAYG instalments, updated 17 Dec 2024 ↗
Not included
- Whether a particular contract is employment or contracting, or whether the PSI rules apply to you
- Any recommendation about an ABN, GST registration, a company, a trust or a service entity
- Payroll tax outcomes (see the payroll tax guide), state stamp duty, or BAS preparation
- GST on goods, non-medical services, or cosmetic and other work not listed above
- Calculation of GST, PSI deductions or instalment amounts
General information only, not personal financial or tax advice. The ATO pages linked here are the authority. Last checked 17 Oct 2026.
A rough figure — not advice. Terms
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