On 11 August 2023, the Victorian State Revenue Office released Ruling PTA‑041 (Relevant contracts — medical centres). In May 2024, the government announced relief from prior assessments on payments to contractor GPs, effective until 30 June 2025, using the Treasurer’s ex gratia powers.

From 1 July 2025, Victoria will exempt payroll tax on both employee and contractor GP wages for fully funded (bulk billed) GP services. The enabling legislation was introduced in October 2024, and the exemption will be calculated by applying the proportion of income from bulk billing to total GP wages.

As part of the 2025 annual reconciliation, medical centres will need to report Exempt GP wages. It is advisable to obtain expert advice before completing this figure.

Victoria also sets the lowest tax‑free threshold among states at $1,000,000 from 1 July 2025 (previously $900,000). Consequently, medical practices in Victoria are more likely to be liable for payroll tax unless exemptions apply. Understanding the new payroll tax rules is imperative for GP practices operating there.

Queensland now provides a full exemption for wages paid by GP practices to GPs via contractors, following amendments to the Payroll Tax Act. The ruling clearly states that patient fees paid directly to individual practitioners are not liable to payroll tax. It also extends to third‑party arrangements, clarifying that patient revenues cannot be funneled through entities (trusts, companies) before being paid to practitioners. However, arrangements where funds are temporarily held by large financial institutions prior to payment to the practitioner are excluded from the exemption.

Queensland’s position notably diverges from other states’ approaches.

The ACT government introduced an amnesty for GP practices that bulk billed at least 65% of patients over a two‑year period ending 30 June 2025, requiring registration with ACT Revenue and MyMedicare to qualify. The ACT Revenue Office also provided examples of when relevant contracts would apply. In July 2025, the requirement to meet a 65% bulk billing threshold was removed—a positive improvement for ACT medical practices. Although bulk billing rates in ACT remain relatively low, this adjustment contributes to broader trends in medical practice payroll tax.

On 11 August 2023, the NSW Revenue Office released a payroll tax ruling consistent with other states. After consultation with peak bodies, NSW instituted a 12‑month pause on audits from 4 September 2023 to 3 September 2024, during which no interest or penalties were applied to unpaid payroll tax.

After the audit moratorium, legislation introduced a rebate for practices whose GP services are bulk billed. In metropolitan Sydney, the rebate applies if at least 80% of GP services are bulk billed; in regional areas, the threshold is 70%. The rebate applies to the portion of payments considered under relevant contracts.

Where a medical centre employs both contractor and employee GPs, the “relevant proportion” used for rebate eligibility must account for services delivered by both groups. However, once eligibility is met, the rebate is only applied to amounts paid to contractor GPs under a relevant contract. GP practices can claim the rebate via the “Contractor” section of the payroll tax return, where required disclosures are made.

No specific rulings regarding GP practices have been released in the Northern Territory. Effective 1 July 2025, however, the threshold for payroll tax has increased to $2,500,000. It remains possible that future policy changes may align NT with national reforms, but as of now, no targeted concessions for medical practices are in effect.

General practices in South Australia were eligible to register for a payroll tax amnesty covering 1 July 2018 to 30 June 2024. For those practices, many were advised that their existing GP arrangements would be deemed ‘relevant contracts’ under Revenue SA’s interpretation. Consequently, those practices are now expected to report and pay payroll tax from 1 July 2024.

From 1 July 2024, an exemption applies to payments tied to bulk‑billed consultations. The introduction of this payroll tax obligation is expected to increase costs for many general practices, with many likely to raise patient fees to offset the additional tax burden.

Tasmania has not announced any concessions or amnesties related to medical practice payroll tax. During the 2024 election campaign, both sides committed to proposing legislation to exempt contracted GPs if elected—but no official ruling has emerged. Tasmania is part of the Harmonisation Agreement and its payroll tax legislation already contains a ‘relevant contract’ definition, suggesting that any future law would mirror other states. To date, payroll tax for medical practices is not a prominent issue in Tasmania.

Western Australia’s payroll tax regime diverges in its reliance on common law tests rather than strict contract definitions. It requires a holistic assessment of the contractor–practice relationship, including factors such as work hours, rosters, leave entitlements, patient fee collection, invoicing, advertising and financial practices. GP practices must maintain service agreements that accurately reflect the working relationship to avoid being captured under payroll tax.

WA currently offers a $1,000,000 tax‑free threshold, under which most GPs will not be liable for payroll tax, and there is no announced intention to change these provisions. Nevertheless, practitioners should exercise caution when structuring agreements and interpreting WA’s rules, as they differ in approach from those in harmonised states.