Allied Health Practitioners & Payroll Tax

Relevant contract exemptions that may apply

These are the harmonised exemptions under the relevant contract provisions. Each is a factual test on the specifics of your arrangement — verify with your adviser before relying on any of them.

• Services provided to the public generally — if the practitioner sees private patients through other arrangements.
• Services performed by two or more persons — if the practitioner brings their own assistant.
• Services provided for 90 days or fewer — short-term or locum engagements.
• Services of a kind ordinarily required for fewer than 180 days a year — episodic services.

Allied health and the scope of the relief provisions

The medical payroll tax relief introduced between 2024 and 2026 is scoped to general practitioners. Allied health practitioners — podiatrists, optometrists, dietitians, occupational therapists and others — fall outside every one of those provisions, in every jurisdiction that has one.

The distinction is about practitioner type rather than about how the service is funded or how the practice is structured. An allied health practice with the same billing model as a general practice has the same deemed wages exposure, but none of the relief.

The mixed-practice risk

The most common error in a mixed practice is applying the GP exemption to the whole clinical team. Because the relief is scoped by practitioner type, the GP cohort's payments may be exempt while the allied health cohort's payments remain fully taxable — and the practice's payroll records have to be able to tell them apart.

Where payments to all practitioners are aggregated into a single service-fee figure, the exemption cannot be applied correctly, and the error tends to surface on assessment rather than in the practice's own reporting. Separating the cohorts in the payroll system is the prerequisite for claiming anything at all.

The practical fix is procedural rather than technical. A payroll that records each practitioner's discipline alongside their payments lets the practice apply the exemption to the GP cohort and leave the rest in the base, period by period. Building that split into the ordinary payroll run costs far less than reconstructing it under review, when the practice is being asked to justify figures it never separately captured.

Establishing the allied health position

The starting point is the arrangement: does the practice bill and remit, or do practitioners bill in their own right and pay the practice? Where the practice collects and remits, the remitted amount is the deemed wage in every jurisdiction except Western Australia, where the analysis is common-law.

From there, the group structure determines whether a threshold is available at all. Only the Designated Group Employer claims it, and a related service entity can reduce or eliminate the shelter. The documents to assemble are the service agreements, the billing and remittance records, the payroll records separating disciplines, and the group structure showing the DGE nomination.

Building the deemed wage in an allied health practice

The deemed wage in an allied health practice is the amount remitted to the practitioner: gross billings collected, less the service fee retained. The same mechanic applies whether the practitioner is a podiatrist, optometrist, dietitian, occupational therapist, radiographer or sonographer — the discipline does not change the calculation, only the size of the remittances.

What determines whether a deemed wage exists is the invoicing arrangement. Where the practice bills and remits, the remitted amount is the deemed wage in every jurisdiction except Western Australia; where the practitioner invoices in their own right and pays a facility fee, the analysis changes and may produce no deemed wages.

A worked allied health scenario

Take a Tasmanian allied health practice with $800,000 of employed staff wages and $1,400,000 remitted to contractor practitioners. The combined taxable wages reach $2,200,000. After Tasmania's $1,250,000 threshold, $750,000 is taxed at 4.00% ($30,000) and $200,000 at 6.10% ($12,200) — $42,200 in total.

No relief applies, because allied health practitioners are outside the GP-scoped exemptions in every jurisdiction. The threshold, its apportionment across the group, and the four relevant-contract exemptions are the only reductions available.

Radiology, pathology and imaging groups

Radiology, pathology and imaging groups are the most exposed part of the allied health cohort, because their contractor arrangements are frequently structured as Service Facility Agreements and the billings can be substantial. A group with several sites accumulates remittances quickly, and once the entities are grouped the combined wage base can exceed the threshold in every jurisdiction in which it operates.

Because no relief applies to any allied health discipline, the only levers are the group structure and the choice of Designated Group Employer. For a multi-site imaging group, ensuring a DGE is actually nominated, and holding the wage base in the entity best placed to use the threshold, can change the liability materially without altering the clinical arrangements.

A multi-state imaging group also meets the apportionment rule head-on. Each state's threshold is claimed separately and apportioned by that state's share of the group's national wages, so a group that is large nationally can find every state's shelter reduced at once. The combined effect is that the group's taxable base can exceed the threshold in each jurisdiction it operates in, with no single state's position looking unusual on its own.

A second allied health scenario and the group lever

Take a South Australian allied health practice with $400,000 of employed staff wages and $900,000 remitted to contractor practitioners, giving $1,300,000 of taxable wages. South Australia's $600,000 deduction leaves $700,000 taxed at 4.95% — $34,650.

No exemption applies, because allied health practitioners are outside the GP-scoped relief in every jurisdiction. The deduction is a group entitlement, so if the practice is grouped with a related entity nominated as the Designated Group Employer it may pay 4.95% on the whole $1,300,000 — $64,350.

For a multi-site allied health or imaging group the accumulation is the real risk: each site's remittances add to the group's wage base, and the deduction is claimed once. Mapping the group and confirming the DGE is the exercise that most often changes the outcome.

For an allied health practice the group is the whole game. With no relief available in any jurisdiction, the only variables are whether the arrangement creates deemed wages and where the threshold sits — and the second is decided entirely by the group structure and the DGE nomination.