The GP's Guide to Managing Tax & Finances

Ok, so you’ve spent years studying medicine. You know how to diagnose illness, treat patients and manage risk. But when it comes to managing your tax and money, most new GP contractors are handed a provider number and a contract and expected to figure it out for themselves.

The reality is that many doctors earning excellent incomes still find themselves living pay cheque to pay cheque, stressed about tax bills and wondering where all the money went.

The good news? Building wealth is actually pretty boring. You don’t need to pick winning shares, time the property market or become a finance expert. You just need a simple system and the discipline to stick to it.

At Tolevsky Partners, we encourage our GP contractor clients to follow this 8-step plan so they can stop stressing about tax and money, and get back to doing what they do best—looking after patients.

Step 1: Set Up a Dedicated 'Practice' Bank Account

Before you do anything, you need to do one simple thing: open a dedicated practice bank account. Think of it as your financial control centre.

Every dollar you earn as a GP goes into this account, and every work expense comes out of it. Link a debit card to the account and use it exclusively for practice-related spending. When you’ve covered your business expenses and set aside money for tax, simply transfer the surplus to your personal account and pay your living expenses from there.

It’s a simple habit that makes a huge difference.

Why? Because wealth starts with clarity. Most doctors don’t have an income problem—they have a visibility problem. When business and personal spending are mixed together, it’s almost impossible to know where your money is going.

Keep them separate, and everything becomes easier: bookkeeping, BAS, tax returns and, most importantly, making smart financial decisions.

Step 2: Put Aside Money For Future Tax Bills

This step alone will save you from financial stress later. Every time money lands in your account, immediately transfer 30% into a separate sub-account labelled 'Tax'.  Not later. Not when you feel like it. Immediately. Treat it like it never existed. You bank should be able to let you set up sub accounts under your existing bank account to make this easy.

Most contractors get into trouble not because they don’t earn enough, but because they spend money that actually belongs to the ATO.

The system is simple:

• Get paid
• Move 30% to tax account
• Live on what’s left

When your tax bill arrives, the money is already sitting there.

Step 3: Set Up a Bookkeeping System 

Here’s a little secret: most contractor GPs don’t have a bookkeeping problem—they have a system problem.

Income goes into one account, expenses come from another, receipts end up in the glovebox, and tax time becomes a treasure hunt.

The solution is simple. You need to have a book keeping system like Xero.

Every transaction is automatically captured, giving you a complete and accurate record of your practice finances. No spreadsheets. No sorting receipts. No sunday afternoons spent categorising transactions.

The biggest tax mistakes aren’t complex—they’re missed deductions, incomplete records and poor bookkeeping. A simple system eliminates most of these problems before they happen.

Getting started is easy, all you need to do is register for Xero,  Then inviting Tolevsky Partners as you adviser.  Please send your invite to team@tolevskypartners.com.au. 

For GP's we recommend the 'IGNITE PLAN' which is $35 per month (tax deductible) . You can register for Xero by clicking here.

Our "done for you' service  will handle the bookkeeping, BAS, tax returns and everything in between, so you can stop worrying about paperwork and spend more time with your family, on the golf course, planning your next holiday or simply enjoying life.

Step 4: Build an 'Emergency Fund'

Now that you have the foundations in place—separating your finances, setting aside tax and maintaining good bookkeeping—the next step is learning how to direct your money with purpose. Managing tax is important, but tax savings alone won’t make you financially independent.

To retire early, reduce your reliance on clinical income and create long-term financial security, you need a system that automatically converts your surplus cash flow into wealth-building assets. The goal is simple: spend less than you earn, invest the difference consistently and allow time and compound growth to do the heavy lifting.

The doctors who achieve financial freedom aren’t necessarily the highest earners—they’re the ones who develop a repeatable system for managing their money and stick to it year after year.

Before you start investing or paying down debt, your first goal is to build a $5,000 Emergency Fund.

This money isn’t for a new TV, a holiday or the latest gadget. It’s there for life’s little surprises:

• Car repairs
• Dental bills
• Emergency travel
• Household breakdowns

Set up a separate savings account linked to your practice bank account and call it 'Emergency Fund.' Then start building it until you reach $5,000.

Why? Because financial success isn’t just about growing wealth—it’s about avoiding financial setbacks. When the unexpected happens (and it always does), you can simply pay the bill and move on without reaching for a credit card or dipping into your investments.

It’s a small buffer that buys something money can’t always buy: peace of mind.

Step 5: Eliminate 'Non Deductible' Debt

Now it’s time to clean up expensive debt because this is not tax deductible which makes it very expensive debt. That includes:

• Credit cards
• Personal loans
• Car loans (unless they are deductible)
• Buy-now-pay-later debt

List them from smallest balance to largest. Ignore interest rates. Pay minimums on everything except the smallest debt. Attack that one first.

Once it’s gone, roll that payment into the next debt. This creates momentum—and momentum is what gets you out of debt faster than anything else. Leave your home loan, investment loans and student debt for later.

Step 6: Build a Fully Funded 'Emergency Fund' 

Once consumer debt is gone, upgrade your safety net. Build an emergency fund that covers three months of living expenses.   Ask yourself: “If I couldn’t work tomorrow, how long could I survive?” This fund protects you from bigger shocks like illness, injury or income disruption. This money stays in your Emergency Fund account. It is your financial shock absorber.

Step 7: Invest into Super

Start building your long-term wealth. We recommend you set a periodical debit from your practice account so that you automate your superannuation contributions. 

These contributions are tax deductible. Just be mindful of contribution caps which are currently $30,000 p.a. for 2026 financial year and what you should aim for. The goal is simple: Build enough wealth so that work becomes optional—not compulsory.  

Step 8: Pay Off Your Home Early and Build Wealth

Your mortgage is usually the final debt standing between you and financial freedom. Many people obsess over interest rates, but forget the real cost: what you earn before tax to pay it.

There are two simple strategies that make a huge difference: Banks rarely reward loyalty. Compare rates annually and ask your lender to match or beat competitors. If they won’t, move.

Fortnightly repayments can also save tens of thousands over the life of a loan and shorten it by years. Click here to learn a simple hack that will save you $160,000 on your home loan.

Once your home is paid down, shift your focus to building wealth through : 

• Superannuation
• Diversified investments
• Property (if appropriate)

Then protect it properly with a Will and make sure you have the appropriate income protection and life insurance in place . 

Final Thoughts

Most doctors don’t have a money problem. They have a system problem. A GP earning $250,000 with a simple structure will often outperform someone earning double with no plan at all.

Keep it simple.

Separate your money.

Set aside tax first.

Avoid consumer debt.

Invest consistently.

Do that for long enough, and money stops being something you worry about—and starts becoming something you control.