06/01/2025
Are you an OHT or hygienist who is about to start working on an ABN or switching from hourly pay to commision?
Are you confused on what is involved and how to manage?
Look no further, read below:)
An accountant with experience in the dental or medical industry can be beneficial. While it is not strictly necessary to engage one specializing in these fields, it can be challenging for some general accountants to fully understand specific industry nuances, such as lab fees. In such cases, you may need to provide additional explanations or ask your employer to clarify the arrangement with your chosen accountant.
To simplify, if you are on a 40% commission structure, you earn $40 for every $100 you bill.
There are two additional factors to consider: 1. GST (Goods and Services Tax)
2. Lab bills
GST:
Service Facility Agreements (SFAs) typically charge a “rental fee” to cover the costs of providing the facility, advertising, staff, consumables, and other business expenses. This fee is subject to GST. For example:
• If you bill $100, the clinic charges you 60% ($60) plus 10% GST on that amount ($6), totalling $66
• You would be paid $34. However, the $6 GST is credited back to you when you lodge a BAS (Business Activity Statement) or file your tax return, effectively restoring your full $40 earnings.
Lab Bills:
Lab fees will also impact your pay. For instance, if you charge $300 for a mouthguard and the lab fee is $50, your commission is calculated on the net amount: 40% of ($300- $50), which equals 40% of $250 = $100
It’s worth noting that some lab fees include GST, while others are GST-exempt. While this may slightly affect your calculations, it is usually negligible if the majority of your work consists of procedures like cleanings, fillings, extractions, and x-rays.
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