The veterinary locum world is changing. With a shortage of veterinarians and fully-qualified nurses in Australasia, more and more people are beginning to add to their income with extra work available at different clinics. Whether you're a seasoned locum or looking to just start out, you need to consider how the government sees you as an independent business, how your taxes will change, and what to consider in your wage. In this article we cover ABNs, Finding Work, Wages, Invoicing, Super, Taxes, as well as GST.
A lot of clinics are starting to prefer that their locums have ABNs. Acquiring one may feel like a huge task, but getting an ABN is probably the simplist process available from the Australian Government. At VLL, we have acquired ABNs for operating as locums as well as for running this site, each in under 10 minutes. If you provide your Tax File Number (TFN), you will receive your ABN immediately in most cases.
Click Here to be taken to the ABN website and click the "Apply for an ABN" button.
Here's a quick walkthrough:
There are a few ways to find locum work, and although we have our biases, we'll try to review them objectively.
Word of Mouth - The most common way to find work is typically through word of mouth from locum-to-locum or clinic-to-locum, and to be honest, this method works quite well. The benefits of this system are that clinics tend to feel more comfortable with a locum that has been recommended to them than a locum they have had no connection with whatsoever. If all goes well, it's also easier to acquire work through the same connection in the future, which makes word of mouth a nice way to go. The downside of this system is that each clinic is only exposed to a small pool of locums and other locums tend not to be aware of the work available at most clinics. The few locums available to each clinic also tend to receive e-mails, texts, and phone calls without end, making day's off feel like you're still working.
Facebook - There are plenty of facebook groups where you can advertise available work. This is a great way to get the message out, but information quickly gets lost or becomes outdated. Saw a post that could work with your schedule? Now where was that? Which group was it in, or was it on your main feed? Crap. Although 100% free, the downside is that Facebook isn't very searchable when it comes to posts for work.
Agencies - Very often clinics run out of available locums to contact and need to recruit third-party agencies to find locums for them (the predominant agencies in Australia being Kookaburra and Vetlink). These are a double-edged sword, as although clinics only pay when a locum position (or full-time position in the case of Vetlink) is filled, they pay either a hefty fee or a percentage of the locum's salary. The downside for the locum is that this typically reduces the salary you can negotiate due to the fees the clinic is required to pay to the agency, and there are also continual checkups by the agency to ensure you are only acquiring work at that clinic through them to secure their continued business.
Vet Locum List - Clearly our favourite, but for great reasons! VLL is open to the entire community and is the only service that doesn't charge a commission on hired locums, which frees up cash and prevents political conflicts between clinics and agencies. Vet Locum List is also the only service to allow locums to search for work when they want to look for it, in locations they want to work that fits there schedule. Best of all? VLL is unique in that there are no obligations to us once you find work. Now THAT's a service!
In the end, the wage you charge is your choice. Some prefer to work less frequenly and price themselves high to avoid being contacted often, others price themselves low to make it more likley that they'll acquire work. It is important to remember as a contractor that you are not receiving many benefits associated with being an employee (holiday pay, sick leave, public holidays, overtime, continuing education, etc), so don't select a wage that will leave you at a disadvantage. You should also remember to incorporate GST and Superannuation (in some cases, see below) into these rates. If you are using Vet Locum List, you can place your wage on your profile for clinics to see, and this rate is also sent to both parties in an acknowledgement e-mail when work is confirmed. If you have alternatively agreed apon rates with a clinic, we recommend you get it in writing.
This is the fun part (or at least should be)! Enjoy it and see what you can learn. Working at different clinics will expose you to new medicine, systems, thought processess, equipment, clientele, and training opportunities. Locuming can be a great way to advance yourself as a Veterinarian / Nurse, so take advantage of the opportunity!
After interviewing clinic managers, we can tell you that one of the hesitations clinics have when hiring a new locum is in regards to setting them up for payment. Some groups prefer to have all of their locums registered as employees of the company to make it simpler for payroll, however this also deters them from hiring new locums because of the process of adding them to their system. Some groups, however, have adapted to the developing locum culture of the veterinary profession and actually prefer to be invoiced by a locum with an ABN. In helping to move you forwards, we have prepared mock and blank templates for your use that can be saved, accessed, and printed when needed.
If your gross turnover is less than $75,000/year as a locum (not on payroll / as an employee), then you will not be required to register your ABN for GST and you can use the "Invoice" template provided here:Sketched Invoice
If your gross turnover is greater than $75,000/year as a locum through independent contracts (again, not on payroll / as an employee), then you will be required to register your ABN for GST and you can use the "Tax Invoice" template provided here:Sketched Tax Invoice
Note: These resources are here to aid you and may require adaptation before use. We strongly recommend that you consult your tax professional regarding your taxation requirements when considering the requirements of your invoice.
Even with an ABN, your employer is required to treat you as an employee when it comes to superannuation payments. If you earn more than $450 in a calendar month, the clinic will have to pay your super on top of your wages, but this goes directly into your super account (not in your pocket... yet). You can simplify this by providing your employer with your "Choice of Super Fund" form as well as your TFN (and ABN). We recommending having these forms either printed or ready electronically.
If the clinic you are working for has stated that they will not be paying your super (for whatever reason, loophole, justification, etc), make sure you factor this into your price or charge for it as a separate line on your invoice:
Super: 9.5% x wage = Amount;
Total: Total wages + Super +/- GST
Visit https://www.ato.gov.au/General/Other-languages/In-detail/Information-in-other-languages/Superannuation-basics-for-employers/ for more information.
Although you would probably like to close your eyes and hope it goes away, you will have to pay income tax on your net income once you lodge your income tax return each year. When you invoice a clinic / customer for your work, they will pay you a gross amount (including GST) and will not deduct money for taxes (this is different if you are registered as an employee with the company, which some groups prefer to do).
If you invoice and locum as your main source of income, you will have to pay tax in more frequent instalments, so remember to set aside enough money to go toward your GST payable when you lodge your quarterly Business Activity Statements (if GST registered). Of course, your taxes will be based on your full income for the year, not just what you have invoiced, so you will likely owe the government money.
As a brief example of what to expect, if you made $50,000 in gross payments as a contractor, you would subtract your operating expenses (we will use $20,000 as an example... you'd be surprised), and be left with $30,000 net. The income tax payable on $30,000 would be close to $2,500, so you will need to have this set aside come tax time. There are many factors that can influence your end-of-year income tax return, so we strongly recommend that you consult your tax professional well in advance regarding lodgement.
A GST number will be required only if you are grossing >$75,000 / year and paid apart from payroll. You can get this at anytime, so don't feel rushed to do it immediately. The reason for the GST number? The GST money you collect is not actually yours, but you are collecting it on behalf of the government. Set this money aside, along with your tax money, to avoid being surprised by a large bill in tax season. If you need information on acquiring a GST number go here: https://www.ato.gov.au/Business/GST/Registering-for-GST/. If you have an ABN, you can add a GST number to it by clicking here.
Many thanks to Adam Seery Accounting - www.adamseeryaccounting.com - for contributing their insight and expertise on this topic. At VLL, we strive to provide the most accurate and up-to-date information on our topics, and therefore seek the consult of professionals whenever possible.