Payments made to contractors may be taxable if the arrangement is considered a relevant contract for payroll tax purposes. Revenue Circular PTA041 – Relevant Contracts – Medical Centres explains the application of the relevant contractor provisions under the Payroll Tax Act 2011 to an entity that conducts a medical centre business.
Designated Medical Practices – Exempt GP Wages
From 1 July 2025, employers who are designated medical practices are exempt from the requirement to pay payroll tax on wages paid or payable to a General Practitioner (GP), employee or contractor, for medical services that are bulk-billed or delivered under Part V of the Veteran’s Entitlements Act 1986 (Cwlth) or under the Workers Compensation Act 1951.
This exemption replaces the temporary amnesty, which applied up to 30 June 2025, for medical practices with contracted GPs. Unlike the amnesty, the exemption removes the minimum 65% bulk billing requirement and instead applies to wages and payments paid or payable to GPs for an exempt medical service, such as a bulk billed service.
Historical liabilities to 30 June 2023
Medical practices are liable to pay payroll tax on payments made to contracted general practitioners (GPs) unless a contractor exemption applies. Given a potential lack of awareness of the payroll tax treatment of contractors among general practitioners, the ACT Government will waive any payroll tax liabilities up until 30 June 2023 for medical practices which have not paid payroll tax on payments to general practitioners. Medical practices which engage general practitioners under relevant contracts will automatically receive this exemption and do not need to apply for it.
Presentation
Visit the following link to view the full presentation: Payroll Tax and Medical Centre Businesses Presentation