Tax Planning Priorities for Dentists and Dental Practices in South Australia
The final weeks of the financial year are an important period for dentists. The timing of decisions around deductions, superannuation, equipment purchases and practice structure can influence taxable income and the financial position of a practice for the year ahead. Dentists also face specific tax considerations due to contractor arrangements, service entity structures, equipment investment cycles and the way clinical income is generated.
Hood Sweeney has supported dentists and dental practices across South Australia for many years and is a long‑standing partner of the Australian Dental Association SA Branch. Our work with practice owners, associates and contractors gives us a clear view of the tax issues that matter most at this time of year.
The following areas are the key tax planning priorities for dentists as 30 June approaches.
Confirming Your Working Arrangement
A dentist’s tax position depends on how they operate. The most common arrangements include:
Self-employed dentists who manage their own GST, BAS and business deductions.
Employed dentists who are taxed through PAYG.
Contractor dentists who must ensure their arrangements comply with Personal Services Income rules.
This is the time to confirm that your arrangement is documented correctly and that your deductions align with the way you work.
End-of-Year Deduction Planning
Dentists can legitimately claim a wide range of deductions, but timing is important. Common areas to review include:
Clinical equipment and consumables purchased before 30 June.
Practice operating costs such as software, insurance and maintenance.
Travel between clinics when substantiated.
Superannuation contributions made before the contribution cut‑off date.
Dentists who operate through a practice entity should also review service fees, equipment leases and any prepaid expenses that may be deductible this year.
Professional Development and Deductibility for Dentists
Professional development is deductible only when it relates directly to the dentist’s current scope of practice. The ATO requires a clear connection between the training undertaken and the income the dentist is presently earning.
This means:
Training must relate to the dentist’s existing profession.
Courses that prepare a dentist for a new specialty are not deductible because they relate to future income, not current income.
Examples:
A general dentist can claim CPD courses, ADA events, clinical refreshers, infection control updates, digital dentistry training and other education that supports their current work.
A general dentist cannot claim orthodontic, endodontic or oral surgery specialty training if they are not already practising in that specialty. These courses are considered to be opening up a new income‑earning activity and are therefore non‑deductible.
This distinction is important for dentists who are planning further study or considering a pathway into a specialty. The timing and structure of that study can influence both tax outcomes and cash flow.
Reviewing Your Business Structure
The structure of a dental practice influences tax outcomes, income distribution and asset protection. As the financial year closes, it is worth reviewing whether your structure still suits your circumstances.
Common structures include:
Sole trader for simple arrangements.
Partnership for shared ownership.
Company for defined governance and liability protection.
Trust for income distribution and asset protection.
For practice owners, this is also the time to prepare distribution minutes, review service entity arrangements and confirm that documentation supports the way income is allocated.
Payday Super for Dental Practices
From 1 July 2026, superannuation must be paid at the same time as wages. This applies to all employers, including dental practices with dentists, hygienists, assistants, reception staff and casuals.
Key points for practice owners:
Super must be processed each pay cycle rather than quarterly.
Payroll systems must support STP enabled super payments, so contributions are sent on time.
Cash flow planning becomes more important because the quarterly buffer is removed.
Back pay, bonuses and off cycle payments also trigger super at the time they are paid.
Transitioning away from the ATO Clearing House is required because it closes on 30 June 2026.
For South Australian dental practices, the most significant pressure point will be July 2026, when the final quarterly super payment and the first Payday Super contributions fall in the same month.
Practice owners should review payroll processes, software capability and cash flow forecasts before year end to ensure they are ready.
Superannuation Planning Before 30 June
Superannuation remains one of the most effective tax planning tools available to dentists. Key considerations include:
Concessional contributions up to the annual cap.
Carry forward unused caps which can be valuable for dentists with variable income.
Non concessional contributions for those building long term wealth.
Dentists who operate through their own entity should also confirm that employer contributions have been processed before the cut-off date to ensure deductibility.
Some dentists consider SMSFs for practice premises or other investments. These require careful planning and compliance.
Managing Debt and Cash Flow for Tax Purposes
Tax planning also involves managing debt and cash flow in a way that supports the practice.
Areas to review include:
Prioritising the repayment of higher interest debt
Using deductible business loans effectively
Maintaining liquidity to meet tax instalments and future equipment needs
Dentists who have recently purchased equipment or expanded their practice should confirm depreciation schedules and ensure finance arrangements are documented correctly.
Key Points for Dentists as 30 June Approaches
Tax planning is most effective when completed before year end.
The way you work influences your tax position and allowable deductions.
Professional development must relate to your current scope of practice to be deductible.
Payday Super will change payroll timing and cash flow for all practices.
Superannuation remains a central part of year end planning.
Structure reviews help ensure income is distributed correctly and tax effectively.
Accurate records and timely decisions support better outcomes.
The information above is general in nature and does not take into account your personal objectives, financial situation or needs. Before acting on any information, you should consider whether it is appropriate to your circumstances and seek professional advice. Taxation considerations are general and based on current laws, which may change. Hood Sweeney Accounting & Business Advisory Pty Ltd ABN 23 166 643 912 is a CPA Practice. Financial planning services are provided by Hood Sweeney Securities Pty Ltd ABN 40 081 455 165 AFSL 220897.