Invoicing as a Healthcare Locum: ABN, GST and Getting Paid

Invoicing correctly is one of the most important administrative tasks for any AHPRA-registered locum working as a sole trader or contractor. A non-compliant invoice can delay payment, trigger unnecessary withholding, or create GST headaches come BAS time. This guide walks through the ATO's tax-invoice rules, how GST-free medical services work in practice, and how to make sure you actually get paid on time.

This article provides general information only and is not personal financial or tax advice. Speak with a registered tax agent about your specific circumstances.

What the ATO Requires on Every Tax Invoice

If you are registered for GST, you must issue a tax invoice (not just an "invoice") for every taxable supply you make. The ATO sets out what a compliant tax invoice must include, and the rules differ slightly depending on the amount.

For any shift or service billed at under $1,000, a compliant tax invoice must clearly show:

1. The words "Tax Invoice"
2. Your identity (name or trading name)
3. Your ABN
4. The date the invoice was issued
5. A brief description of the services provided (and quantity where applicable)
6. The GST amount payable, or a statement that the total price includes GST (valid only when GST is exactly 1/11 of the total)
7. Whether each line item is a taxable, GST-free, or input-taxed supply

For invoices of $1,000 or more, you must also include the buyer's identity or ABN (for example, the agency or hospital group).

If a client asks for a tax invoice, you are legally required to provide one within 28 days, unless the amount is $82.50 (including GST) or less.

ABN: Why It Must Be on Every Invoice

Your Australian Business Number (ABN) is not optional. If you supply services without quoting your ABN, the payer is required by law to withhold 47% of the invoice amount under the PAYG withholding rules and remit it to the ATO. That is not a fine; it is your money held by the ATO until you lodge your tax return. The simplest way to avoid it is to include your ABN on every invoice, every time.

If you do not yet have an ABN, you can register through the Australian Business Register. Most healthcare locums operating as sole traders or through a Pty Ltd structure will need one before their first shift.

GST Registration, the $75,000 Threshold, and GST-Free Medical Services

You are required to register for GST once your annual GST turnover reaches $75,000. Once registered, you must add 10% GST to taxable supplies and lodge a BAS, typically quarterly.

Here is where healthcare gets interesting. The ATO treats most clinical medical and health services as GST-free, meaning you do not charge GST on them and you do not collect GST from the patient or facility. GST-free supplies include services provided by or on behalf of a medical practitioner or other recognised health professional that are generally accepted as necessary for appropriate treatment of the recipient. This covers GPs, specialists, dentists, pharmacists, nurses, midwives, physiotherapists, psychologists, occupational therapists, and paramedics providing clinical care.

Practically, this means the majority of shifts for most locums will appear on invoices with a $0 GST line and a note that the supply is GST-free. You still need to be registered for GST if your turnover exceeds $75,000, and you still lodge a BAS. You simply do not collect GST on GST-free supplies.

Some services are not GST-free. Cosmetic procedures where no Medicare benefit is payable are taxable at 10%. Where the recipient of your supply is not the patient but another business (such as a staffing agency paying you for shift labour rather than for patient care), the GST-free status depends on the structure of the arrangement. If you are invoicing an agency for shift labour rather than directly supplying a patient with health services, seek advice on how that arrangement is classified.

Setting Clear Payment Terms

Locums often work across multiple agencies and direct workplace relationships, and each may have different payment cycles. Establishing your terms upfront reduces disputes and late payments.

Common approaches:

• State your payment terms clearly on every invoice. "Payment due within 14 days of invoice date" or "Net 30" are standard. Seven-day terms are common for locum agencies that pay on a weekly cycle.
• Include bank details on the invoice. BSB and account number, or a payment link. Do not make the payer hunt for them.
• Number invoices sequentially. This makes reconciliation easier for both parties and is good record-keeping practice for your own BAS and tax return.
• Keep a copy of every invoice. The ATO requires businesses to retain tax records for five years.

Chasing Late Invoices

Late payment is a fact of life for many locums. A systematic approach beats ad hoc chasing.

1. Send a polite reminder at or just after the due date. Reference the invoice number, amount, and due date. Many late payments are genuinely overlooked.
2. Follow up by phone if the email reminder gets no response within a few days. A direct conversation is often faster than another email thread.
3. Escalate in writing. If payment is significantly overdue, a formal letter of demand referencing the outstanding amount and a final payment deadline creates a paper trail. Under Australian consumer and contract law, you are entitled to payment for services rendered.
4. Consider a statutory demand or small claims tribunal for persistent non-payers. For most locum invoice amounts, the relevant state civil and administrative tribunal (VCAT in Victoria, NCAT in NSW, and equivalents in other states) handles debt recovery at low cost.
5. Review agency agreements. Some agency contracts include payment terms that limit your rights. Know what you have signed before escalating.

How Sessional Helps

Managing tax invoices, GST classifications, and payment chasing across a dozen shifts a month is time-consuming. Sessional's invoicing tools generate compliant tax invoices with your ABN, the correct GST treatment per service type, and sequential numbering baked in. Automatic payment chasers send reminder emails on your behalf when invoices go past due, so you do not have to track every outstanding amount manually.

The GST and BAS readiness dashboard tracks your running turnover against the $75,000 registration threshold, flags GST-free versus taxable shifts, and pre-fills your BAS summary. If you earn above the threshold and want to stay on top of quarterly obligations without a spreadsheet, it is worth a look at the Plus and Pro plans.

Sources

• ATO: Tax invoices
• ATO: Setting up your business invoices
• ATO: Withholding if ABN is not provided
• ATO: GST and health
• ATO: Medical services (GST-free health)
• business.gov.au: Register for GST