Managing mixed income across agency, direct and PAYG locum work is one of the most common tax headaches for AHPRA-registered healthcare professionals in Australia. Whether you are a GP, pharmacist, nurse, physiotherapist, psychologist, occupational therapist, dentist, paramedic or specialist, it is increasingly normal to earn from three or more sources simultaneously: agency-arranged ABN shifts, direct-to-workplace contracts, and casual or part-time PAYG employment. Each income stream is taxed differently, and reconciling them correctly before 30 June matters.
This article is general information only and is not personal financial or tax advice. Consider speaking with a registered tax agent about your individual situation.
ABN Invoicing vs PAYG: The Core Difference
When you work through an agency or bill a workplace directly under your ABN, no tax is withheld from your invoices. You receive the full amount, including 10% GST if you are registered, and it is your responsibility to set aside money for income tax, the Medicare levy, and your own superannuation.
When you work PAYG shifts, your employer deducts tax before you are paid. Your payslip shows gross earnings, the PAYG withholding amount, and the net figure deposited into your account. Your employer also pays the Superannuation Guarantee (SG) on your behalf. For 2025-26, the SG rate is 12% of ordinary time earnings, following the final scheduled increase from 11.5% in 2024-25.
The practical risk of mixing these income streams: if you do not account for both sources when estimating your annual tax liability, you can either over-rely on the PAYG withholding from employment shifts and underpay on ABN income, or underestimate your marginal rate because neither stream sees the full picture in isolation.
GST Registration and BAS Obligations
If your total ABN-based turnover (across all workplaces and agencies) reaches $75,000 in any 12-month period, you must register for GST. Once registered, you add 10% GST to your invoices, collect it on the ATO's behalf, and report it through a Business Activity Statement (BAS), which is lodged quarterly for most sole traders.
Your PAYG employment income does not count toward the $75,000 GST threshold; only your business (ABN) income does. If you are hovering near the threshold because of a mix of agency and direct shifts, keep a running total of your ABN invoices across all sources. Missing the registration obligation exposes you to penalties and backdated GST liability.
If you are already registered for GST and your turnover drops below $75,000 (for example, if you move to predominantly PAYG work for a period), you can apply to cancel your registration.
PAYG Instalments: Tax Reserving for ABN Income
The ATO's PAYG instalment system is the mechanism by which sole traders pre-pay income tax on their ABN earnings across the year, rather than facing a large tax bill at assessment time. You are automatically entered into the PAYG instalments system if your instalment income from your latest return is $4,000 or more and your tax payable was $1,000 or more.
Quarterly instalments are due 28 October, 28 February, 28 April, and 28 July. If your ABN income is higher this year than last (common when taking on more direct shifts or starting a new specialty), you can vary your instalment amount to avoid underpaying. Conversely, if you have shifted toward more PAYG work mid-year, you may be able to reduce your instalment.
A practical reserve rate for healthcare sole traders on higher incomes is often 30 to 35 cents in the dollar on gross ABN receipts (before GST), though your actual rate depends on your total income from all sources, deductions, and whether the Personal Services Income rules apply.
Personal Services Income (PSI) and Mixed-Source Earners
Personal Services Income rules apply when more than 50% of your income under a contract is generated from your individual skills and efforts, rather than from a business structure, equipment, or employed staff. For most healthcare locums, PSI applies to both ABN invoicing and direct-to-workplace income.
When PSI rules apply, your deductions are limited to those available to an employee. You cannot, for example, claim rent or interest expenses against PSI. Deductions that remain available include professional indemnity insurance, CPD costs, AHPRA registration fees, and work-related equipment.
Your PAYG employment income is separate and assessed under normal employee rules; PSI only affects your ABN or business income. If you earn across both streams, you may need to apportion deductions carefully.
Reconciling Across Employers at Tax Time
At the end of the financial year, you will need to reconcile:
- All PAYG payment summaries (now reported via Single Touch Payroll and visible in myTax pre-fill) from each employer.
- All ABN invoices issued, including GST collected and any input tax credits claimed on BAS.
- Superannuation: employer SG contributions on PAYG income (12% for 2025-26) plus any voluntary concessional contributions you have made as a sole trader. The concessional contributions cap is $30,000 for 2025-26, covering both employer SG and personal deductible contributions.
- Expenses deductible against your ABN income (within PSI limits).
A common gap: locums who move between agencies and direct contracts mid-year may receive payment summaries from three or more payroll systems. Cross-checking these against your own records before lodging your return prevents errors and avoids ATO data-matching queries.
How Sessional Helps
Sessional's earnings and tax-reserve dashboard is built for exactly this scenario. It tracks ABN invoices and PAYG payslips in one place, applies a configurable reserve rate to your ABN income so you always know how much to set aside, and flags when your rolling ABN turnover approaches the $75,000 GST registration threshold. The super tracker monitors both employer SG credits and your own contributions against the $30,000 concessional cap, across every workplace and agency you work with. When it is time to invoice, invoice templates include GST treatment and auto-chasers so nothing slips. If you work across rural and metro sites, the cents-per-km tool applies the ATO rate of 88 cents per kilometre (capped at 5,000 business kilometres per vehicle) for 2025-26. See pricing for plan options, including Free and Plus/Pro tiers.