Are gynaecologist consultation fees GST-free?

Yes. Gynaecological consultations and obstetric services provided by a registered medical practitioner are GST-free under Division 38-B of the A New Tax System (Goods and Services Tax) Act 1999. This covers in-rooms consultations, in-rooms procedures (colposcopy, hysteroscopy, IUD insertion), surgical procedures in hospital theatres, obstetric management, deliveries and postnatal care. The practice is still GST-registered and can claim input tax credits on business purchases, but does not charge GST to patients or health funds on clinical fees.

How are hospital theatre fees reconciled in bookkeeping for a gynaecologist?

Theatre income for a gynaecologist typically comes from two sources: the health fund or Medicare (which pays the scheduled fee or benefit) and the patient gap (which the patient pays out of pocket). For private hospital surgical work, the private health fund pays its benefit directly to the specialist, usually within a few days to a few weeks of the procedure depending on the fund. The patient pays any gap at or before the time of surgery. In Xero, the full procedure fee is recorded as income when the procedure is performed, and the two separate receipts (health fund and patient gap) are matched against that income as they arrive. Theatre fee income from public hospitals (VMO arrangements) is usually paid as a sessional or per-procedure fee from the hospital directly.

How do I account for assistant surgeon fees I pay to other specialists?

When a gynaecologist or obstetrician pays an assistant surgeon (typically another specialist) to assist in theatre, those costs are deductible expenses for the principal surgeon's practice. The assistant surgeon bills the principal surgeon (or in some models, bills the patient directly). Where the assistant is a GST-registered specialist, their invoice will include GST and the principal surgeon can claim an input tax credit on the BAS. Where the assistant surgeon uses a company structure, the invoice comes from the company and the same ITC rules apply. These costs should be coded in Xero to a specific account (Assistant Surgeon Fees or Professional Fees) so they can be identified separately in practice reporting.

What equipment does a gynaecologist claim as fixed assets?

Common fixed assets in a gynaecology practice include: ultrasound machine (in-rooms diagnostic), colposcope, hysteroscope, resectoscope, light source, insufflator, diathermy unit (for in-rooms procedures), examination couch, and general computing equipment. Each is recorded in the fixed asset register with its ATO effective life (typically 8 to 10 years for medical equipment). A practice with a significant equipment base should maintain an asset register in Xero that records the purchase date, cost, depreciation method, and annual depreciation charge for each item.

Is obstetric management income treated differently from gynaecology surgical income?

For GST purposes, both obstetric management (including antenatal care, delivery and postnatal visits) and gynaecological surgical income are GST-free health services. The bookkeeping distinction is primarily between income sources (Medicare vs health fund vs patient direct) and timing (obstetric management fees are typically billed as a package, partly paid during pregnancy and partly after delivery, creating a revenue recognition question about when income is recorded). A comprehensive obstetric package should be recognised as income as services are provided across the antenatal, delivery and postnatal periods, rather than all at the time of invoicing.

What is the correct entity structure for a gynaecologist in private practice?

Most Victorian gynaecologists and obstetricians in private practice operate through a service company (Pty Ltd) or a combination of company and trust. The personal services income rules apply to most specialist medical income, as it is earned primarily through the personal effort of the individual practitioner. However, a company structure still provides access to the 25% corporate tax rate on retained profits, the ability to salary-package superannuation efficiently, and clear separation between clinical income and investment assets. Structure design for a specialist practice requires a tax agent experienced in medical professional businesses.

Bookkeeping and Tax for Gynaecologists and Obstetricians in Victoria

Published July 2026By Tiffany, True Tally Bookkeeping12 min read

The short answer: Gynaecological and obstetric services are GST-free under the health services exemption in the GST Act. Income comes from multiple sources — private health funds, Medicare, patient gaps and hospital VMO payments — each requiring separate reconciliation. Key bookkeeping challenges are: correctly splitting health fund payments from patient gaps on surgical procedures, reconciling obstetric package income across the antenatal period, coding assistant surgeon costs correctly, and maintaining an accurate asset register for in-rooms diagnostic equipment. True Tally manages all of this for specialist medical practices across Victoria.

The O&G Practice Revenue Landscape

Gynaecology and obstetrics is one of the most complex income structures among specialist medical practices in Victoria. A single gynaecologist may receive income from five or more different sources in a given week: private health fund benefits, Medicare rebates, patient gaps, hospital sessional payments, and potentially medicolegal report fees. Each of these has different timing, different payers, and in some cases different GST treatment.

Without a bookkeeping system designed specifically for this income mix, the practice's accounts quickly become difficult to reconcile, management reporting is unreliable, and the BAS is at risk of being prepared incorrectly. The consequences of poor bookkeeping in a high-income specialist practice compound faster than in lower-revenue businesses: a reconciliation problem that sits unresolved for two or three quarters can represent tens of thousands of dollars of unidentified income or missing credits.

True Tally's approach for specialist medical clients is to set up income accounts in Xero that mirror the actual income sources of the practice, build a reconciliation process for each source, and produce monthly management reports that give the specialist clear visibility over their practice revenue, cost structure and profitability.

Revenue Streams and Their GST Treatment

The table below shows the main income sources for a Victorian gynaecologist or obstetrician, their GST treatment, and the correct Xero account classification.

Revenue Source	GST Status	Typical Payer	Xero Account
Specialist consultation (in rooms)	GST-free	Patient + Medicare rebate	Medical: Consultations
Gynaecological surgery (private hospital)	GST-free	Health fund benefit + patient gap	Medical: Surgical Fees
Colposcopy / hysteroscopy (in rooms)	GST-free	Patient + Medicare/health fund	Medical: In-Rooms Procedures
IUD / contraceptive procedures (in rooms)	GST-free	Patient + Medicare	Medical: In-Rooms Procedures
Obstetric management package	GST-free	Patient + health fund + Medicare	Medical: Obstetrics
Delivery and theatre (obstetric)	GST-free	Health fund + patient gap	Medical: Obstetrics
Public hospital VMO sessional fees	GST-free	Hospital (DHS/DHHS contract)	Medical: Hospital VMO
Medicolegal reports (gynaecology)	Taxable (10% GST)	Law firm, insurer, WorkCover	Professional: Medicolegal

Hospital Theatre Fee Reconciliation

Surgical income from private hospital procedures is one of the most difficult income streams to reconcile correctly in a gynaecologist's accounts. A single surgical procedure generates multiple financial transactions that arrive at different times from different payers:

The health fund benefit is paid to the specialist directly, usually within 5 to 30 business days of submitting a health fund claim. Each health fund has its own payment processing schedule and may pay differently for in-hospital versus out-of-hospital items.
The Medicare rebate component (in most private hospital surgical cases, Medicare pays 75% of the schedule fee, and the health fund tops up the balance to their benefit level) is either paid directly to the specialist or included in the health fund payment depending on the assignment arrangement.
The patient gap is paid by the patient, usually at or before the time of the procedure. Practices with a no-gap or known-gap agreement with specific health funds will have different gap structures.

The correct bookkeeping approach is to record the full surgical fee as income at the time of service, then reconcile each subsequent receipt (health fund payment and patient gap) against that income entry. Without this approach, the practice has no mechanism to identify unpaid health fund claims, outstanding patient gaps, or procedures for which payment was never received.

A specialist performing 10 to 20 surgical procedures per month with multiple health funds will have a complex reconciliation task that is very difficult to manage without a bookkeeper dedicated to the practice or a practice manager with strong bookkeeping skills. True Tally takes this on as part of our specialist practice service, producing a monthly reconciliation that identifies outstanding claims by fund and patient.

Equipment and Asset Depreciation for Gynaecologists

Gynaecologists operating private rooms in Victoria typically invest significantly in in-rooms diagnostic and procedural equipment. This equipment must be registered in the Xero fixed asset register and depreciated over its ATO-assigned effective life.

Equipment	Est. Effective Life	DV Rate	Typical Cost Range	IAWO Eligible?
Ultrasound machine (in-rooms)	10 years	20%	$35,000 to $100,000	No (exceeds $20k)
Colposcope	10 years	20%	$20,000 to $45,000	No (exceeds $20k typically)
Hysteroscope / resectoscope	8 years	25%	$15,000 to $35,000	No (typically exceeds $20k)
Light source / insufflator	10 years	20%	$8,000 to $20,000	Possibly (if under $20k)
Examination couch (electric)	10 years	20%	$5,000 to $14,000	Yes (under $20k)
Diathermy / electrosurgical unit	10 years	20%	$5,000 to $18,000	Yes (if under $20k)
Practice computers and software	4 years	50%	$2,000 to $8,000	Yes (under $20k per unit)

Effective life figures are based on the ATO's TR 2023/1 and general medical equipment classifications. Self-assessed effective life is permitted where a specific item is not listed, provided the assessment is supportable. Confirm with your accountant before applying a self-assessed life to high-value assets.

Assistant Surgeon and Anaesthetist Costs

Gynaecological surgery frequently involves costs that the operating surgeon must manage: assistant surgeon fees and, in some practice models, anaesthetist coordination. How these costs flow through the practice depends on the surgical model in use:

Model 1: Each specialist bills independently. The assistant surgeon bills the patient (or health fund) directly for the assistant item under their own provider number. The patient receives separate accounts from the surgeon, anaesthetist and assistant. No cost flows through the principal surgeon's practice in this model.
Model 2: The principal surgeon bills and pays the assistant. The surgeon invoices the patient or health fund for the full procedure, then pays the assistant from that income. The assistant's fee is a deductible expense in the surgeon's accounts. The assistant issues a tax invoice to the surgeon's practice (including GST if the assistant is GST-registered). The surgeon claims an input tax credit on the BAS.
Model 3: A service entity bills. In practices operated through a service trust or company, the entity bills for all services and then pays each specialist their engagement fee. The bookkeeping is managed at the service entity level.

The bookkeeping error that occurs most often in Model 2 is treating the assistant surgeon payment as a drawings or owner payment rather than as a deductible practice expense. This inflates the practice's taxable income by the amount of the assistant fee and costs the practice its tax deduction. Every assistant fee must be documented with a tax invoice from the assistant and posted to an appropriate expense account in Xero.

Obstetric Package Billing and Revenue Recognition

Private obstetric care is typically billed as a package covering antenatal consultations, delivery and postnatal follow-up. An obstetrician may charge $5,000 to $8,000 or more for a full private obstetric package, with a portion collected at or before the first visit, further payments during the pregnancy, and a final payment after delivery.

Revenue recognition is the key bookkeeping question: when is the income recorded? The most defensible approach is to recognise income as services are delivered across the antenatal, delivery and postnatal periods, rather than recording the full package as income when the initial deposit is received. A deposit received at the first visit is not income at that point; it is a liability (deferred income) until the services are provided.

In Xero, an obstetric package can be managed using a deferred income liability account into which deposits are posted, with transfers to income as each stage of care is completed. This produces a more accurate picture of the practice's monthly revenue and avoids the distortion of recognising a large package payment as income well before the services are delivered.

Health fund payments for obstetric care follow a different timing again: the health fund typically pays its benefit after delivery and receipt of the claim. The practice's bookkeeping must track the outstanding health fund receivable during the pregnancy period.

Key Deductions for Victorian Gynaecologists and Obstetricians

Allowable deductions for a gynaecologist or obstetrician in private practice include:

AHPRA registration fee: Annual medical registration, currently approximately $900. Fully deductible, no GST.
Medical indemnity insurance: Obstetric indemnity premiums in particular are significant due to the long-tail liability in obstetrics. Fully deductible.
CPD and specialist college fees: RANZCOG annual subscription, CPD event fees, specialist conference registrations. Deductible for maintaining and improving specialist skills.
Clinic room rental and practice operating costs: Rent, utilities, consumables (speculums, biopsy forceps, swabs, PPE), sterilisation supplies.
Medical equipment depreciation: Ultrasound, colposcope, hysteroscope, examination furniture, computers.
Assistant surgeon fees paid (where applicable): Deductible where the surgeon invoices the full procedure fee and pays the assistant as an expense.
Practice management software: Subscription fees for clinical practice management systems.
Professional bookkeeping and accounting fees: Including BAS agent fees paid to True Tally.

Watch: Gynaecologist and Obstetrician Bookkeeping Explained

Read the full video transcript

If you are a gynaecologist or obstetrician in private practice in Victoria, the bookkeeping and financial management of your practice is significantly more complex than most other medical specialties. Today I want to walk through the key areas where specialist O&G practices need to get their accounts right.

Let us start with the income side. Gynaecological and obstetric services are GST-free under the Australian GST legislation, the same as other medical services. That means you do not charge GST to patients or health funds on clinical fees. But you do need to be GST-registered because your turnover exceeds the registration threshold, and you do claim GST credits on your practice expenses including equipment, consumables, rent and professional fees.

The complexity in an O&G practice comes from the number of income sources and the timing differences between when you perform a service and when you receive payment. For a routine consultation, the patient pays on the day and Medicare or the health fund pays shortly after. Straightforward. But for a surgical procedure at a private hospital, you might have the patient paying their gap before the procedure, the health fund paying its benefit two to four weeks later, and in some cases a Medicare assignment that affects when different amounts flow to different accounts. If you are not reconciling surgical income at the procedure level, you have no way of knowing which procedures have been fully paid, which have outstanding health fund claims, and whether your income is correctly recognised in your accounts.

Obstetric package billing adds another layer. When an obstetrician charges a package fee for antenatal, delivery and postnatal care, the patient typically pays a significant deposit at the first visit and further payments during the pregnancy. But that initial payment is not all income in the month it is received. It is deferred income representing services not yet provided. The correct accounting approach is to hold deposits in a liability account and transfer to income as services are delivered. This gives you a much cleaner picture of your monthly revenue and makes your financial reports meaningful throughout the year.

For equipment, a gynaecology practice often carries significant in-rooms equipment: an ultrasound, a colposcope, a hysteroscope, examination furniture, diathermy unit, computers. All of these should be in Xero's fixed asset register. An ultrasound machine at sixty thousand dollars depreciates at twenty percent per year under the diminishing value method, producing a twelve thousand dollar deduction in year one, nine thousand six hundred in year two, and so on. If your bookkeeper is just coding the ultrasound invoice to equipment expense and not creating a fixed asset, you are claiming the full cost in one year and creating a tax timing issue.

Assistant surgeon costs need careful attention. If you are paying an assistant surgeon from your practice income, those payments are a deductible expense in your accounts. But they need to be documented with a proper tax invoice from the assistant's practice or company, and they need to be coded to an expense account, not mixed up with your own drawings or salary. Getting this wrong means you either lose the deduction or have to unscramble it at year end at accounting cost.

True Tally works with specialist medical practices across Victoria on all of these. We set up Xero to reflect the actual income structure of the practice, build reconciliation processes for health fund payments and Medicare, maintain the asset register, and produce monthly management reports that give you genuine visibility over your practice. If your current bookkeeping is not giving you that, book a free call at truetally.com.au or call us on 0468 159 950.

Tiffany Registered BAS Agent · Xero Certified Advisor · True Tally Bookkeeping
Last updated July 2026

Frequently Asked Questions

Are gynaecologist consultation and surgical fees GST-free?

Yes. Gynaecological consultations, in-rooms procedures and surgical work are all GST-free health services under Division 38-B of the GST Act. Medicolegal reports are an exception and are taxable at 10% GST. The practice is still GST-registered and claims input tax credits on business expenses.

How do I reconcile health fund payments for gynaecological surgery?

Record the full procedure fee as income at the time of service. Reconcile the health fund benefit payment and patient gap separately as each payment arrives, matching them against the income record. Use a reconciliation spreadsheet or practice management software to track outstanding health fund claims by fund and patient.

How do I account for assistant surgeon fees I pay?

Obtain a tax invoice from the assistant surgeon's practice or company. Code the payment as a deductible practice expense (Assistant Surgeon Fees) in Xero. Claim the input tax credit if the assistant is GST-registered. Do not code these payments as owner drawings or salary.

How is obstetric package income recognised correctly?

Deposits received at or before the start of antenatal care should be posted to a deferred income liability account, not to income. Transfer the amount to income as services are delivered across the antenatal, delivery and postnatal periods. This produces accurate monthly revenue reporting throughout the year.

O&G specialist practice looking for bookkeeping support across Victoria?

True Tally sets up and manages Xero for gynaecology and obstetric practices, including health fund reconciliation, theatre income tracking, asset registers and monthly management reporting. Book a free 20-minute call.

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