Medical specialists—including psychiatrists, anaesthetists, and dermatologists—often incur tens of thousands of dollars in professional expenses annually. However, the ATO has tightened its scrutiny on what qualifies as a deductible work-related expense for medical practitioners in 2026.
Generally speaking, the ATO allows claims for medical college memberships, specific exam fees, and travel between private rooms and public hospitals, provided these expenses directly maintain or improve the skills required for a practitioner's current income-earning activities.
Below is an overview of how the ATO currently approaches high-value work deductions in the medical field.
College Fees, Exams, and Self-Education
The ATO's guiding principle for self-education and professional development is "sufficient connection." For an expense to be deductible, it typically needs to maintain or improve the specific skills required in a practitioner's current medical role.
College Memberships & CPD: Annual membership fees for professional bodies (e.g., RANZCP, ANZCA, ACD, RACS) and mandatory Continuing Professional Development (CPD) courses are usually fully deductible, as they are required to maintain professional accreditation.
Exams and Training: Fees for fellowship exams are generally deductible if the practitioner is already employed in a related capacity (e.g., a registrar earning income while completing specialty training). However, the ATO does not allow self-education claims if the study is designed to obtain a completely new role or qualification.
The $250 Threshold Removal: For practitioners reviewing past tax strategies, it is worth noting that the ATO officially removed the old rule requiring taxpayers to exclude the first $250 of self-education expenses for costs incurred from 1 July 2022 onwards.
Reimbursements: If a hospital or clinic reimburses course or exam fees, those expenses cannot be claimed as a tax deduction.
Medical Equipment and Depreciating Assets
High-value technical instruments and specialised medical equipment are standard for many specialists. The ATO treats these expenses differently depending on their cost.
Under $300: Tools and medical equipment costing $300 or less can often be claimed as an immediate deduction in the income year they are purchased.
Over $300: For assets costing over $300 (such as specialised diagnostic equipment or high-end laptops for telehealth), the ATO requires the decline in value (depreciation) to be claimed over the asset's effective life, rather than claiming the entire amount upfront.
Apportionment: If an asset, such as a mobile phone or internet connection, is used for both work and private purposes, the ATO requires strict apportionment so that only the work-related percentage is claimed.
Travel: Public Hospitals vs. Private Rooms
Travel claims remain a frequent trigger for ATO audits among medical professionals.
Deductible Travel: Practitioners can generally claim the cost of travelling directly between two separate workplaces on the same day—for example, driving from a morning list at a public hospital directly to private consulting rooms.
Non-Deductible Travel: Standard commutes between a home and a usual place of work are classified by the ATO as private expenses and cannot be claimed, regardless of how far the travel is or if the practitioner is working outside normal business hours.
Overnight Conferences: If CPD requires a practitioner to be temporarily away from home overnight, accommodation and meals are typically deductible. However, if a private holiday is added onto the trip, the ATO generally only allows a claim for the seminar fees, not the flights or accommodation.
Case Study: Deductions in Practice
Dr. Chen, a Sydney-based Anaesthetist, works primarily at a public hospital but also contracts at two private day-surgery clinics.
In this scenario, Dr. Chen would typically be eligible to claim her ANZCA college fees and the cost of mandatory airway management workshops. Because she drives directly from the public hospital to the private clinic on Tuesdays and Thursdays, she would generally use a logbook to claim the work-related portion of her vehicle's running costs and depreciation. She recently purchased a $1,200 tablet specifically to review patient charts and access medical journals; under ATO rules, she would need to depreciate this asset over its effective life rather than claiming the $1,200 immediately.
Frequently Asked Questions (FAQ)
Are medical indemnity insurance premiums deductible? Generally, yes. Medical indemnity insurance directly relates to a practitioner's ability to practice medicine and earn an income, making it a standard deductible expense.
Are HECS-HELP repayments tax deductible? No. The ATO expressly disallows deductions for repayments made toward study and training support loans, including HECS-HELP and FEE-HELP.
Is travel to a medical gala or fundraising dinner deductible? Usually, no. The ATO views tickets to hospital fundraising galas or dinners as private entertainment expenses, even if the practitioner works at the hospital hosting the event.
What records need to be kept for the ATO? The ATO requires written evidence, such as tax invoices, receipts, and bank statements, for all claimed expenses. For car expenses using the actual cost method, a compliant 12-week logbook must be maintained.
Ready to optimise your tax structure? Contact the team at Santoro Grieco to discuss how these rules apply to your specific medical practice.