Victoria and South Australia offer relief to certain medical practices

Victoria and South Australia offer relief to certain medical practices

Following much lobbying and conjecture, the payroll tax position for medical practitioners has become somewhat clearer in Victoria and South Australia, with both of these states announcing concessions on Thursday 23 May 2024.

These concessions in each of these states apply as follows:


  • For all Victorian general practice businesses, an exemption from any outstanding or future payroll tax assessment will apply to payments to contractors through to 30 June 2024 - the remainder of this financial year.
  • A further 12-month exemption through to 30 June 2025 will be available for any payments to contractor general practitioners (GPs), where the organisation hasn’t received advice or begun paying payroll tax on these contractor doctors.
  • From 1 July 2025, further exemptions will apply to those contractor doctors who continue to bulk bill.

South Australia

  • In South Australia, the previously announced amnesty expires on 30 June, with the Government announcing that any medical practitioners who continue to bulk bill from 1 July 2024 would remain exempt from payroll tax.

While these concessions may appear welcome and address some of the medical industry's conjecture and concerns, the exemptions may raise more questions than answers. These only apply to GPs and as such, the previously communicated payroll tax position continues to apply to allied health professionals such as surgeons, radiotherapists, physiotherapists, and optometrists. In addition, for the exemption to apply in Victoria and South Australia, the GPs need to bulk bill. This may pose an issue for medical practices that are mixed billing clinics in that bulk billed patient fees that are eligible for exemption will need to be separately identifiable from privately billed patient fees (which will be taxable for payroll tax purposes).

This is likely to cause additional administration for medical practices in determining which payments are subject to payroll tax and which are not—for example, a GP who performs services at a clinic four days a week and doesn’t work for anyone else. There are no other relevant contractor exemptions available, so prima facie, their wages are subject to payroll tax.

In this instance, if the doctor bulk bills some patients but not others (for example, on weekends, etc.), additional analysis is required to determine the proportion of the fees that are subject to payroll tax and those that are exempt. This is likely to be a substantive administrative exercise, creating both an administrative and a financial cost.

Positions in other states

None of the other states have offered any additional announcements following the recent announcements in Victoria and South Australia. No doubt, there will be continued pressure for consistency, as we are now faced with various different positions across the nation regarding a tax that is supposed to be harmonised.

Indeed, the only consistency we have now on this issue is the inconsistency amongst states.

The payroll tax position with respect to medical practices is as follows:

New South Wales

A 12-month pause on audit activity relating to GPs, as well as a 12-month pause on interest and penalties that may accrue in this period. This pause is set to end from 4 September 2024. In addition, Revenue Ruling PTA 041 - Payroll Tax Act – Relevant Contracts – Medical Centres was issued on 11 August 2023, with a harmonised ruling issued by Victoria and South Australia on the same day.

Australian Capital Territory

An amnesty is available for contracted GPs up until 30 June 2025 but is contingent on the medical practice registering with Revenue ACT and bulk billing at least 65 per cent of their patients. Revenue Ruling PTA 041 - Payroll Tax Act – Relevant Contracts – Medical Centres was issued on 23 September 2023.


An amnesty is available for contracted GPs up until 30 June 2025 but is contingent on the medical practice having registered with Queensland Revenue prior to 10 November 2023. In addition, Public Ruling PTAQ000.6.3 - Relevant contracts – medical centres was issued on 21 February 2024, the third version of this ruling since it was initially published. Unlike PTA 041 in the other jurisdictions, PTAQ000.6.3 specifically addresses the payroll tax implications for different payment arrangements (for example, where payments are made directly to a practitioner).

Northern Territory and Tasmania

have not released any public guidance on the medical practices issue so their position continues to remain unclear.

Western Australia

Medical practices and other allied health professionals operating in Western Australia are in the enviable position of not being impacted by these arrangements, due to a lack of relevant contract provisions. Payroll tax obligations will only arise where GPs and other practitioners are considered employees and not contractors.

How BDO can help

Given the various inconsistencies and current uncertainties across the medical and allied health industry, organisations must understand the changing payroll tax landscape. We have extensive experience in the payroll tax area and are here to assist you in navigating the payroll tax arrangements and implications as they apply to your organisation and the specific jurisdiction that you operate in. If you have any questions regarding this article or require assistance with any of your payroll tax obligations, please contact a BDO employment tax specialist or your local BDO adviser.