Queensland Government launches Payroll Tax Amnesty Program for contracted GPs

The Queensland government has announced a new payroll tax amnesty program aimed at payments made to contracted GPs in the state. This is a welcome relief to concerns raised by the healthcare sector regarding the impact of the recent payroll tax changes on medical centres in Queensland. 

The changes, which came into effect in December 2022, mean that medical centres with contracting GPs and other health practitioners are now subject to payroll tax on payments they make to those contractors. The changes have had a significant impact on medical practices, particularly large centre operators with high number of GPs and allied service providers.

This amnesty program offers a payroll tax amnesty on payments made to contracted GPs until 30 June 2025, in order to support existing Qld practices not currently complying with the payroll tax requirements to have additional time to implement necessary changes and either meet compliance requirements or change their existing contracting arrangements.

Who is eligible for the amnesty?

The program is open to Qld medical practices who have not previously registered for payroll tax or paying payroll tax on their payments to contracting GPs. However, the amnesty is not available for medical practice that are already complying with their payroll tax obligations. It also does not extend to any other non-GP practitioners, or to any new medical practices. It is important to discuss with your adviser to confirm if your current arrangements are not considered to be relevant contracts for payroll tax purposes.

To be eligible, medical practices must register their expression of interest in the program via the Queensland Revenue Office website by 30 June 2023. QRO will provide further information once the program is open, however applicants are likely required to disclose details of any payments made to contractors and ensure they are registered for payroll tax if they have not already done so.

Considerations for payroll tax

When considering whether your medical practice may be subject to payroll tax, there are many factors to consider including:

  • Does your medical practice provide use of rooms and facilities as a service or a lease?
  • Does your medical practice exercise control over the practitioner?
  • Are the GPs required to use your medical practice facilities to see and treat their patients, or do they have discretion on how they conduct their own business?
  • Are the patients attributed to the independent GP/other practitioner or to your medical practice?
  • Are the patient fees collected and paid directly to the GP, or are they collected by your medical centre and then remitted to the GP?

At Prosperity, we provide a payroll tax audit risk review for medical practice operators to determine if you need to complete an expression of interest form by 30 June 2023. Medical practices that successfully apply for the amnesty will not be required to pay payroll tax on payments made to contracted GPs up to 30 June 2025 and for the previous 5 years (i.e. 2018-25 amnesty period).


The Queensland Commissioner of State Revenue had relied upon the outcome of the Thomas and Naaz case in forming their view in the December 2022 public ruling. The NSW Court of Appeal had dismissed the appeal of the case on 14th March 2023, which means contracting GPs will continue to be treated as employees for payroll tax. It is important that medical practice operators review their current arrangements to understand their exposure to payroll tax, particularly in NSW and VIC which has not announced any payroll tax amnesty programs.

Interestingly, we found that in assessing the payroll tax liability of the medical centres in the original court case, the NSW Chief Commissioner did not assess the amounts paid directly to three medical practitioners who administered their own claims and did not participate in the administrative arrangement other contracting practitioners were subject to. This does not mean they are not liable for payroll tax, which raises the question about whether such arrangements are accepted as not subject to payroll tax?

In Conclusion

Following the outcome of the court case, it looks like there may be two options for medical centre operators from here on:

  1. Specify contract arrangements are for room rental and facilitation services, and there is no control of patients, working hours, or restraints over doctors, more likely not subject to payroll tax; or
  2. Retain control over patients of the practice, restraints, and doctors’ sessions and payments, but having to wear the additional payroll tax as a cost of business, and choose to pass this cost onto the patients and/or doctors.

The Queensland payroll tax amnesty program is an opportunity for impacted medical practices to manage their business affairs in preparation for the payroll tax, either by accepting the payroll tax cost as part of the business, or restructure their business model to exclude contracting GPs. Although limited to only GPs for now, the program is a positive step towards supporting the healthcare industry in Queensland, encouraging other states and territories will follow suit.

Did you know the Queensland government recently announced an extension of the 1% payroll tax reduction for regional employers? Read more

It is important that impacted medical practices take advantage of the support available and ensure you are fully compliant with your payroll tax obligations. This will help to avoid any potential penalties or prosecution and ensure you are well positioned to continue providing high-quality healthcare services to your patients.

If you have any questions regarding the above, contact Director of Business Services and Taxation Brendan Campbell at bcampbell@prosperity.com.au or Ashley Quinton at aquinton@prosperity.com.au. Alternatively, we have Specialist Health Sector Advisers in each of our offices.  If you would like to speak to one in your location, call 1300 795 515.

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