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Congratulations on being offered a new GP job! This is an exciting time, but before accepting a new role, it’s important you read your medical services contract carefully prior to signing. As it is a legally binding agreement, you want to ensure you understand the terms and conditions which set out the nature of your working relationship with your new practice.

Typically, there are two types of medical services contracts, namely service agreements and contractor’s agreements. A service agreement is where the GP runs their own business and engages the practice to provide the practice management services to you. In contrast, as a contractor you are engaged to provide medical services to patients of the practice. It is important to understand which type of agreement being entered into, as it can impact the terms of the contract.

This article will provide a guide to some of the key clauses typically included in a medical services contract.

The Correct Legal Details

The terms should be contained in a written agreement, either as a contract, deed, or at the very least a letter.  From a legal perspective, it’s crucial that the proper legal name and ABN of both parties along with the location(s) where work will be performed be listed.  Note, that it is not always the case that practice name is the actual legal entity by which the practice operates through.

Basic Obligations

Your medical services contract should set out the services that the practice will provide to you, and your obligations to them.  It is recommended you have clear autonomy in your clinical decision-making, and the contract should not limit this autonomy in any way.

The commencement and end date of the contract, as well as the type of contract (i.e., ongoing, fixed term, or maximum term), should be clearly stated.  Be aware that fixed-term contracts typically cannot be terminated before the end date.  If one party terminates the contract before the end date, the other party may pursue a claim for breach of contract and seek damages for any losses they have suffered as a result.

To ensure the smooth functioning of the practice and the continuity of patient care, your medical services contract often will include requirements about agreed hours of work. There may also be conditions relating to leave from work to ensure other medical practitioners are available to cover the patients when you are absent.

The medical services contract will also require you to comply with practice policies, and procedures.  Although you are not an employee, you can still be required to comply with practice policies that regulate workplace behaviour and work health and safety (such as bullying or sexual harassment) and administrative policies.  As part of this, you will likely be required to provide current Ahpra registration documents, proof of professional indemnity and disclose any restrictions on your ability to practice


Another critical aspect of the contract is remuneration.  If you are paying the practice to provide practice management services to you, typically you will be required to pay a service fee which is a percentage of your receipted billings, being the money which is actually received from Medicare and other sources. The contract should specify whether you are entitled to a share of incentive payments such as SIPs and PIPs. And, it should also explain the invoicing and taxation requirements, so you can ensure that invoicing is done correctly.

One important thing to note is that as the medical practitioner, you are personally responsible for all amounts billed against your Medicare provider number, even if the practice is responsible for billing on your behalf. Therefore, it is important to know that invoicing is done correctly.  You may wish to discuss with the practice how and when they will provide you with billing sheets so you can assess whether Medicare has been billed correctly.  In the past, practices have asked medical practitioners to assign all incoming monies to the practice bank account. However, due to recent developments in payroll tax law, many medical services contracts now require all incoming monies to be paid to the medical practitioner’s bank account. You will then be responsible for paying the service fee to the practice from that account.

Also, as GST is generally payable on practice management services provided by the practice you may want to consult with your accountant about the taxation requirements and if you have any questions or concerns about invoicing or taxation, be sure to bring them up with your practice prior to signing your contract

Payroll Tax and Superannuation

One other crucial consideration is whether the medical practitioner is required to pay payroll tax and superannuation. The law in this area is complex, and whether a practice is required to pay these amounts will often depend on the terms and conditions contained in a medical services contract. Many medical services contracts seek to pass the requirement to pay payroll tax and superannuation on to medical practitioners. Seeking legal or accounting advice is recommended to ensure you are aware of any potential financial obligations.


In conclusion, medical services contracts are essential documents that practitioners must understand before taking up a new role. It is essential to seek legal or accounting advice to ensure you are aware of any potential financial obligations. By carefully reviewing the terms upfront, including the type of agreement, location, services provided, obligations, and remuneration, you set yourself up for a successful and fulfilling working relationship with your new practice.

At Alecto, we will help you with any questions that may arise during the contract stage. For a confidential discussion about your next GP role, please contact us at [email protected]