The anxiety and fear around payroll tax rulings for medical practices has peaked, with most states confirming their stance on the subject.
Many GP practices will face big payroll tax bills in the future causing many to close or pass on this cost to patients.
At Alecto we have been keeping an eye on recent developments in this space and wanted to provide a quick summary of where each state is at. If you are unsure on the specific payroll tax or employment requirements for your practice, please seek advice from your accountant or legal advisors.
Western Australia
The WA Deputy Premier Rita Saffioti confirmed that they will not be taking any action on Payroll tax for the moment and that the WA government continue to view GPs working with independent agreements as ‘contractors running an independent business’.
South Australia
The South Australian government has granted a payroll tax amnesty. After considering the industry’s concerns, they amnesty will be in place on payments made to contracted general practitioners until 30 June 2024 for those practices who have successfully applied for the amnesty. Bear in mind that amnesties are different to exemptions, whilst practices may still be liable for the payments and still need to lodge returns, they may not have to make them on payroll between 1 July 2018 and 30 June 2024.
Queensland
Likewise, the Queensland Government has considered the ‘potential lack of awareness’ of the payroll tax related to GP practices and have announced they will also provide a payroll tax amnesty on payments until 30 June 2025 for those that apply for the amnesty.
Victoria
The Victorian Government has taken a stricter stance on payroll tax compared to other states. Though the industry outcry has been immense, the state government has refused to pause their requirements for medical practices or to provide any amnesty period for medical practices. This issue is still very much in the media.
Australian Capital Territory
The ACT Government has also introduced a Payroll tax amnesty until June 2025 however in a slightly different way to other states as this amnesty comes with a eligibility requirement. Practices applying for amnesty will only be eligible if they bulk bill around two-thirds of their patients.
New South Wales
Like other states, NSW has also paused payroll tax audits for medical practices for a period of 12 months as they have recognised the lack of understanding of the industry and is consulting with industry contacts. NSW government stated, ‘ Any threat to bulk-billing rates for NSW patients is a concern for the government, given the potential flow-on increase in presentations to emergency departments and hospitals, which are already under significant strain.’
This update is current as of 4 September 2023