ln this article, we’ll explore how locum doctors are paid, and what you should do before you start locum work. This article is relevant for JMOs, specialists, GPs and everyone in between.
Before you start working as a locum doctor, you should know that there are a few different ways to get paid. Sometimes the employer will determine how you are paid, and at other times, you will have a choice.
These are the basic models:
As an employee, you are engaged directly by the employer. They pay you the agreed rate, plus superannuation. They will subtract tax from your pay, and you will receive a payslip.
2. Sole Trader
If you hold an ABN as a sole trader, some employers may wish to engage you in this way. You issue an invoice to the employer, and they pay you a gross amount directly. You should check with your accountant whether you need to charge for GST on your invoice. You can apply for an ABN as a sole trader here. This method is most common for GPs, who are typically paid a percentage of billings.
Some locums already have a company set up for investments, or super. Others will set up a company specifically for the purposes of locum work. The company will have an ABN, and may also be registered for GST. Under this model, you will also issue an invoice for payment and will be paid a gross amount.
4. Locum Agency Payment
In some cases, the locum agency will pay you directly. They will bill the employer for your time, plus of course their fee. They may pay you as either an employee, sole trader, or a company. At Beat Medical, we only pay locums as employees, because we offer significant benefits from salary packaging. Another reason we do this is because of the issue of ‘deemed employment’ or ‘sham contractors’, which sometimes arises as an issue when locums are paid as contractors. The ATO has handed harsh penalties to recruitment agencies and employeres who attempt to dodge super and payroll tax obligations.
So, before you start locum work:
Talk to your accountant about the best options for you
Think about what methods of payment are suitable for your circumstances
Consider structures that you already have set up (e.g. company, ABN) that could be used for locum work
Have a chat with a medical recruitment agent about trends for your specialty/field, and what you should consider
Massive Disclaimer: We are not accountants, we are not lawyers. Nothing in this article should be seen as financial or legal advice, and it may not necessarily relate to you!