Queensland to Issue New Ruling Exempting GPs from Payroll Tax

In a significant development and under pressure from peak industry bodies for GPs, the Queensland Revenue Office is set to release a new ruling that is expected to bring relief to GPs and practice owners across the state. This new ruling will clarify that payroll tax will not be applicable to payments made by patients directly to GPs.

This announcement marks a notable departure from the recent positions taken by numerous Australian states which saw GPs and medical practice owners in Queensland (and indeed across the country) faced with the threat of payroll tax on earnings of independent contracting doctors. Under these new interpretations of payroll tax law, GPs at certain medical practices would have been considered employees and be subject to payroll tax.

The proposed new ruling is anticipated to offer much-needed clarity on this matter, reassuring GPs and practice owners that payroll tax will not be applied on payments received directly from patients, including Medicare benefits and any out-of-pocket fees. This clarification comes as a result of ongoing discussions and consultations between medical associations, stakeholders, and the Queensland government. RACGP says “It’s a sign that the government recognises the value of general practice care”.

Queensland once again leads the way, having been the first state to offer a payroll tax amnesty program for GPs, which has since been followed by SA and recently ACT and NSW. This now leaves VIC as the only mainland state still without even a formal amnesty program in place for GPs. 

The release of this ruling is eagerly awaited by the medical community, and by Prosperity as an advocate for all our medical professional clients. While the precise details of the ruling are yet to be disclosed, it is anticipated that this clarification will be a welcome change of course, providing much-needed clarity and relief for medical practitioners and patients alike, with a positive impact for medical practices in Queensland.

Given the anticipated ruling, it is a great opportunity to consider the current business arrangements of your medical practice to ensure it allows you to benefit from the new payroll tax exemption. Read our article here on how medical practice owners can protect themselves from the threat of payroll tax – this is particularly important for non-Queensland practices, which does not yet have the benefit of the payroll tax relief.

If you have any questions regarding the above, contact Director of Business Services and Taxation Ashley Quinton at aquinton@prosperity.com.au or Brendan Campbell at bcampbell@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.