Background The Pharmaceutical Benefits Scheme (PBS) is Australia’s national drug subsidy program. This paper provides a practical guide to researchers using PBS data to examine prescribed medicine use. Findings Excerpts of the PBS data collection are available in a variety of formats. We describe the core components of four publicly available extracts (the Australian Statistics on Medicines, PBS statistics online, section 85 extract, under co-payment extract). We also detail common analytical challenges and key issues regarding the interpretation of utilisation using the PBS collection and its various extracts. Conclusions Research using routinely collected data is increasing internationally. PBS data are a valuable resource for Australian pharmacoepidemiological and pharmaceutical policy research. A detailed knowledge of the PBS, the nuances of data capture, and the extracts available for research purposes are necessary to ensure robust methodology, interpretation, and translation of study findings into policy and practice.