Health Practice Tax

Editorial guides

Guides

Two taxes catch Australian medical practices out more than any other: payroll tax on how practitioners are engaged and grouped, and GST on which services are GST-free and which are taxable. These guides work through both, plus four more areas where a practice's structure decides the tax outcome: superannuation for contractor practitioners, the personal services income rules, Division 7A loans from a practice company, and FBT on a practice vehicle.

Each guide states the position and, where the rule is state-administered, cites the revenue office responsible for it. Payroll tax differs by jurisdiction (and for medical practices it usually does), so those guides say so per state rather than generalising, because a rule that holds in Queensland may be the opposite of the rule in Victoria. GST is a federal tax and applies the same way nationally, so the GST guide is the exception: one answer, not eight. Superannuation, PSI and Division 7A are federal too, administered by the ATO rather than a state revenue office, so those guides are also one answer rather than eight.

If you want a number rather than an explanation, the calculators and the medical practice tax overview are the faster route. These guides are for the cases where the answer depends on how your practice is structured.

Structuring and grouping

Who counts as one employer, and how the threshold is shared between them. Getting this wrong changes the answer before any rate is applied.

Multi-state apportionment

How a group's single threshold is split between the jurisdictions it operates in, and why the DGE nomination decides which entity can claim it.

Grouping & the DGE

When separate entities are treated as one employer for payroll tax, and how the Designated Group Employer nomination works in practice.

What is taxable

Which payments are wages, which are exempt, and why a contractor with an ABN can still create a payroll tax liability.

What counts as wages

What is included in taxable wages (salaries, superannuation, fringe benefits and deemed contractor payments) and what is exempt.

Contractors & relevant contracts

The relevant contract provisions, the five harmonised exemptions, and the Thomas and Naaz precedent that reset medical practice payroll tax.

Contractor doctors & payroll tax

Why contractor doctors create a payroll tax exposure, why an ABN does not change the answer, and the billing structure that avoids it.

Contractor or employee

Why a practice can treat someone as a contractor for the ATO and still have their payments treated as taxable wages for payroll tax, and how the two tests differ.

Reducing payroll tax

The four levers that actually change a practice's payroll tax bill, and the arrangements that do not work because the revenue office unwinds them.

Registering, lodging and correcting

When the obligation starts, what is due and when, and what to do now that every amnesty window has closed.

Payroll tax registration & lodgement

When registration is triggered, the monthly return and annual reconciliation deadlines, and each jurisdiction's medical-specific obligations.

Payroll tax amnesties & audit pauses

The amnesty or audit pause that operated in each jurisdiction, the window and condition for each, and why every one has now closed.

GST for health practices

Which services are GST-free under the medical exemption, and the two mistakes that cost practices the most: lost credits and ignored turnover.

GST on medical & health services

Which health services are GST-free under the medical exemption, why that doesn't cost you input tax credits, and how GST-free turnover still counts toward the $75,000 registration threshold.

Super, PSI, Division 7A & FBT

Four more federal taxes where how a practice pays and structures itself decides the outcome: whether a contractor gets superannuation, whether personal services income rules apply, what a company can lend its owner, and the tax cost of a car benefit.

Super guarantee for contractor doctors

Why an ABN doesn't decide whether a contractor doctor or allied health practitioner gets superannuation, the delegation-right test, and the 2026-27 contribution base cap.

PSI rules for medical practices

The four Personal Services Business tests, the 80% rule, and why practitioners operating through a company or trust are frequently caught.

Division 7A loans for practice companies

What makes a loan from a practice company complying, the minimum yearly repayment, and what happens when a shortfall becomes a deemed dividend.

FBT on practice vehicles

The statutory formula method, why kilometres driven no longer matter, and when the operating cost method works out cheaper.

Proposed changes

Announced commitments that are not yet law, set against the rules that apply today, with what each would change for a practice. Updated as commitments are made, dropped or legislated.

Victorian election 2026: payroll tax

What each party has committed to on Victorian payroll tax before the 28 November 2026 election, the rules that apply today, and worked examples for practices.

Using these guides

Where should I start with payroll tax for a medical practice?

Start with the structure question, not the rate. How practitioners are engaged and how billings flow determines whether payments are deemed wages at all, and whether related entities are grouped determines how much threshold you have. Both change the answer before any rate is applied.

Do I need to read all the guides?

No. If you engage contractor practitioners under a Service Facility Agreement, start with the contractor doctor guide. If you operate in more than one state, start with multi-state apportionment. If you only want to know what is due and when, the registration and lodgement guide is self-contained.

Are these guides tax advice?

No. They explain how the rules work, cite the administering revenue office for each jurisdiction, and link to the primary source. They are general information for Australian medical and health practices, not advice on your circumstances, and they do not replace a registered tax agent.

How current are these guides?

Each guide is dated and links to the revenue office that administers the rule. Rates and thresholds are drawn from the same verified registry the calculators use, so a legislative change updates the guide content and the calculators together rather than letting them drift apart.

Reviewed by eHealth Systems Pty Ltd