Important – Are you exposed to potential Payroll Tax changes?

Please find below an update to our previous correspondence regarding the liability of medical practices in Australia to pay Payroll Tax on contracted general practitioners (GP’s).

Recent State Government announcements in Victoria and South Australia have delivered major relief for medical and other health practices that engage GP’s as independent contractors or employees within Australia.

These decisions are a timely warning for general and specialist health practices to review the way payments are structured to anyone who operates from their practices.

Victorian Payroll Tax Exemptions

The State Government announced that medical practices are exempt from paying Payroll Tax for contractor GPs and employee GPs for bulk-billed consultations from 1 July 2025.

This also means clinics will not have to pay retrospective Payroll Tax bills for contractor GPs.

The decision, coming into effect next year, will cost the state around $10 million a year and means a Payroll Tax exemption on contractor GP payments until 30 June. Clinics that have not begun paying Payroll Tax on wages to their contractor GPs will receive twelve-month exemptions until July 2025.

South Australian Payroll Tax Exemptions

The SA State Government announced an exemption on the wages earned by GPs for bulk billed services, which will be applied from July this year. It is hoped that this exemption will be an incentive for practices to continue bulk-billing.

This exemption will apply to all GP practices that are liable for Payroll Tax, regardless of whether their GPs are engaged by the practice as an employee or contractor.

Once we have the finer details of their legislations, we will provide an update to this announcement.

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