ACCOUNTING & TAX CONSIDERATIONS

TAX IN NEW ZEALAND

The tax year in New Zealand finishes on March 31st.

Income

As a locum you are self-employed and you will be able to claim back all expenses that relate to your employment. It is worthwhile as it will dramatically reduce your tax bill, thereby keeping more money in your pocket. Examples of expenses include transport, accommodation between locums, cell phone bills, medical registration, medical indemnity insurance, education and all reasonable food expenses.

Keep your receipts and give them to your accountant at the end of the financial year. When paying in cash, write “funds introduced” on the receipt and give to your accountant at the end of the financial year.

GST in New Zealand

You must be GST registered if “your annual turnover for this month and the last eleven months has exceeded $60,000 and your turnover for this month and the next eleven months is expected to exceed $60,000.

As most locum doctors will make this much money in less than two months they will need to register for GST.

ACC

As a self-employed person in NZ you will be required to pay an ACC levy and will be covered for any accidents that happen in Australia or New Zealand. However, you will not be covered for international transfers if you become incapacitated. For this situation you might want personal travel insurance. Some credit card companies offer insurance if you book using their cards so you may want to look into this option.

How do I become GST registered?

There is a step by step process on the IRD website which explains the registration process. IRD GST Site. You can either download the form from the website or order it by calling 0800 257 773.

What happens if the Inland Revenue backdate my GST number?

If your GST number gets backdated then you have one month from the date you received your pay to claim the GST from us.

Once we receive your request, we will pay it directly to your bank account within 5 working days.

Please note that we pay our GST returns on two monthly periods. GST is paid 28 days after the end of the period. Once a payment has been paid to the IRD we will be unable to reimburse you so make sure you contact us as soon as you know you need a backdated GST payment!

Are bonuses GST inclusive?

Bonuses are GST inclusive, therefore if you are registered you will need to pay GST on them.

TAX IN AUSTRALIA

The tax year in New Zealand finishes on June 30th.

Enrolling for a Tax File Number (TFN)

To work in Australia you need a TFN. You can do this when you are in Australia and once the application is submitted you are considered a TFN holder and are eligible to start work pending the actual number.

It is easy to apply for a TFN online by visiting www.ato.gov.au. Select ‘For individuals’ which is located on the left hand side of the screen, ‘Apply for a tax file number’, then ‘Online individual tax file number (TFN) registration’.

Income

In all hospitals in NSW locum doctors will go on the hospital payroll. This means that tax is PAYG (Pay As You Go). If you are not working a full year in Australia or if your time there crosses more than two tax years you should be able to claim a lot of this back at the end of the tax year (June 30). We recommend getting an Australian accountant to process your tax return.

Payment for locum work in Australia

If you are contracting MedRecruit will pay you seven working days after receiving your timesheet. Therefore, as soon as you have finished each assignment (or each fortnight if the job is longer than two weeks) submit your time sheet plus evidence of other agreed expenses e.g. taxis. Filling out the online timesheet is the best way to expedite this process. Let us know if you are GST registered.

Pay Packaging

Pay packaging is a fantastic Australian invention that will be offered at some of the hospitals we offer placement at, even if you are a locum (for placements greater than 3 months). Essentially it allows people up to $9000 of income to be tax free if you can account for it with relevant receipts, of which paying off a credit card is one of them. Even if you are there for less than a year you can compress the full amount into the time you are there, thereby drastically reducing your tax bill.

GST in Australia

As most doctors will be going onto the hospital payroll it is not necessary to register for GST. If you are not going onto the payroll you must be GST registered if “your annual turnover for this month and the last eleven months has exceeded $75,000 and your turnover for this month and the next eleven months is expected to exceed $75,000.

DISCLAIMER

Information contained in this document is provided in good faith and is believed to be accurate at the time of publication. While all care is taken in the preparation of this document MedRecruit cannot be responsible for unintentional errors, omissions or changes in circumstances subsequent to publication. You are advised to consult your personal accountant when it comes to tax matters.

For further information contact our accounts department here. or go to the Inland Revenue’s GST pages www.ird.govt.nz/gst/.