Non-GP Practitioners & Payroll Tax

Where a dental practice is actually exposed

The exposure is the relevant contract provisions. Where a dental practice bills in its own name and remits the balance to a dentist under a service arrangement, the remitted amount is treated as deemed wages in every jurisdiction except Western Australia, and is added to the practice's employed staff wages for the threshold test.

A practice with $600,000 of staff wages and $1,200,000 remitted to dentists has $1,800,000 of taxable wages in NSW, $600,000 above the threshold, taxed at 5.45%. Because no relief applies, the only levers available are the threshold apportionment, the choice of Designated Group Employer, and whether the arrangement in fact creates a relevant contract at all.

Building the deemed wage in a dental practice

A practice billing $180,000 for a contractor dentist and retaining a 35% service fee records a $117,000 deemed wage, calculated practitioner by practitioner and added to employed staff wages for the threshold test.

A worked dental scenario

Take a Victorian dental practice with $500,000 of employed staff wages and $1,000,000 remitted to contractor dentists. Adding the two, the taxable wages come to $1,500,000. Victoria's $1,000,000 threshold applies in full because the group's national wages are below the $3,000,000 phase-out start, leaving $500,000 taxable at 4.85%: $24,250.

Because dentistry has no relief in any jurisdiction, that liability cannot be reduced by a bulk-billing exemption or rebate.

Where corporate dental groups are exposed

Corporate and multi-site dental groups carry the largest exposure, because each site's remittances accumulate into a single taxable wage base once the entities are grouped. A group operating several practices can find its combined wages far above the threshold in every jurisdiction in which it operates, with no relief available in any of them.

The grouping question is also where the shelter is won or lost. Only the Designated Group Employer claims the threshold, so a group that leaves the nomination unmade, or holds the wage base in the wrong entity, pays from the first dollar in every non-DGE member. For a multi-site dental group the group structure is the single largest determinant of the payroll tax outcome.

The apportionment of the threshold adds a second layer for a group that operates in more than one state. Each state's threshold is claimed separately and apportioned by that state's share of national wages, so a dental group that is large nationally can find every state's shelter reduced at once. Because no relief applies to dentistry anywhere, there is nothing to offset the loss, and the group's combined taxable base can exceed the threshold in each jurisdiction it operates in.

A second dental scenario and the group lever

Take an NSW dental practice with $400,000 of employed staff wages and $900,000 remitted to contractor dentists, giving $1,300,000 of taxable wages. After the $1,200,000 threshold, $100,000 is taxed at 5.45%: $5,450. Because dentistry has no relief, that figure cannot be reduced by a bulk-billing exemption or rebate.

The number that does move it is the threshold, and the threshold is a group entitlement. If the practice is grouped with a related service entity nominated as the Designated Group Employer, the practice may hold no threshold at all and pay 5.45% on the whole $1,300,000: $70,850. The difference between $5,450 and $70,850 is decided entirely by the group structure, not by the clinical arrangements.

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.

Building the deemed wage in an allied health practice

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.

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), for a total of $42,200.

No relief applies, because allied health practitioners are outside the GP-scoped exemptions in every jurisdiction.

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 $600,000 of employed staff wages and $1,200,000 remitted to contractor practitioners, giving $1,800,000 of taxable wages. That is above the $1,700,000 shade-in ceiling, so South Australia applies a flat 4.95%, and the $600,000 deduction leaves $1,200,000 taxable: $59,400.

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 $1,800,000: $89,100.

The Medicare benefit pathway and why it does not help

Psychologists can deliver services under Medicare benefit arrangements, including through general practitioner mental health treatment plans, which makes the comparison with general practice tempting. But the relief provisions test the practitioner type, not the funding pathway; a psychologist delivering a Medicare-funded service is still not a general practitioner for payroll tax purposes.

The practical consequence is that a psychology practice has no exemption to claim in any jurisdiction, and its only structural levers are whether the arrangement creates a relevant contract, how the threshold is apportioned across the group, and which entity holds the Designated Group Employer nomination.

Building the deemed wage in a psychology practice

A practice billing $160,000 for a contractor psychologist and retaining a 35% fee records a $104,000 deemed wage, calculated practitioner by practitioner and added to employed staff wages.

A worked psychology scenario

Take a South Australian psychology practice with $600,000 of employed staff wages and $1,200,000 remitted to contractor psychologists. The combined taxable wages reach $1,800,000. South Australia's $600,000 deduction (not the $1,500,000 threshold, which is a different number) leaves $1,200,000 taxable at 4.95%: $59,400.

No exemption applies, because psychologists are not general practitioners.

Telehealth and contractor psychology

Telehealth has made it easier for psychologists to serve patients across multiple practices and jurisdictions, which cuts both ways. It strengthens a claim that the psychologist provides services to the public generally (one of the relevant-contract exemptions), but it can also spread the practice's wage base across more than one jurisdiction, where each state's threshold applies separately and apportionment reduces the shelter available in each.

The practical consequence is that a psychology practice with a distributed contractor cohort should map which jurisdiction each practitioner's remittances fall into, and model each state's threshold and rate separately rather than treating the group as a single wage pool.

A second psychology scenario and the group lever

Take an NSW psychology practice with $500,000 of employed staff wages and $900,000 remitted to contractor psychologists, giving $1,400,000 of taxable wages. After the $1,200,000 threshold, $200,000 is taxed at 5.45%: $10,900. No rebate or exemption applies, because the NSW relief is limited to GP services.

The threshold is the only lever, and it is a group entitlement. If the practice is grouped with a related entity nominated as the Designated Group Employer, it may pay 5.45% on the whole $1,400,000 ($76,300) rather than $10,900. The $65,400 difference is decided by the group structure alone.

Allied health scope and the mixed practice problem

The risk is sharpest in a mixed practice. A practice that employs or engages GPs alongside physiotherapists may assume its GP relief covers the whole clinical team, but the relief is scoped to the practitioner type, not to the practice. The physiotherapy cohort's payments remain fully taxable even where the GP cohort's do not.

That means a mixed practice has to keep the cohorts separable in its payroll records. Aggregating GP and allied health payments into a single service-fee line makes it impossible to apply the GP exemption correctly, and it is the kind of error that only surfaces on assessment.

Building the deemed wage in a physiotherapy practice

A practice billing $150,000 for a contractor physiotherapist and retaining a 40% fee records a $90,000 deemed wage, calculated practitioner by practitioner and added to employed staff wages.

A worked physiotherapy scenario

Take a Queensland physiotherapy practice with $400,000 of employed staff wages and $1,100,000 remitted to contractor physiotherapists. The combined taxable wages reach $1,500,000. Queensland's $1,300,000 deduction leaves $200,000 taxable at 4.75%: $9,500.

The GP exemption does not apply, because physiotherapists are not general practitioners.

Gym-based and multi-site physiotherapy models

Physiotherapy practices increasingly operate across multiple sites, and often through a separate corporate or franchise entity. Where the entities are under common control they are grouped, and only the Designated Group Employer claims the threshold, so a group that leaves the nomination unmade pays from the first dollar in every other member.

Gym-based and franchise models also raise the question of whether the practitioner bills the practice or the practice bills the patient. Where the practice collects and remits, the remitted amount is the deemed wage in every jurisdiction except Western Australia; where the practitioner bills directly, the analysis is different and in some jurisdictions produces no deemed wages.

Grouping is what decides the outcome in a network. Entities under common control are grouped even when they trade under different names or serve different suburbs, and only one member, the Designated Group Employer, holds the threshold. A franchise of separately owned clinics will usually not group, but a network under common ownership will, and the payroll tax difference between the two structures can be the difference between a small liability and a large one.

A second physiotherapy scenario and the group lever

Take a Victorian physiotherapy practice with $400,000 of employed staff wages and $900,000 remitted to contractor physiotherapists, giving $1,300,000 of taxable wages. The $1,000,000 threshold applies in full because the group's national wages are below the $3,000,000 phase-out start, leaving $300,000 taxed at 4.85%: $14,550.

Because physiotherapists are outside every GP-scoped exemption, that figure stands regardless of how much of the practice's work is bulk billed. The threshold is the only shelter, and it is a group entitlement: if the practice is grouped with a related entity nominated as the Designated Group Employer, it may pay 4.85% on the whole $1,300,000: $63,050.

The arithmetic for a specialist practice

In NSW, a specialist practice with $800,000 of staff wages and $2,000,000 remitted to specialists has $2,800,000 of taxable wages. After the $1,200,000 threshold that leaves $1,600,000 taxed at 5.45%: $87,200. No rebate applies, because the NSW rebate is limited to GP services.

The same structure in Queensland is no better: the GP exemption does not reach specialists, so the deemed wages remain in the base and are tested against the diminishing $1,300,000 deduction, which reaches zero at $6,500,000 of Australian group wages. For a large specialist group the deduction is often already nil.

Why the threshold dominates a specialist practice

The scale of specialist remittances is what makes the threshold question so consequential. A practice remitting several million dollars a year to its specialists carries a wage base that dwarfs its employed staff, so the difference between holding the threshold and losing it is measured in tens of thousands of dollars annually. For a specialist practice, no clinical decision changes the payroll tax outcome as much as where the threshold sits.

Building the deemed wage in a specialist practice

Specialist remittances are typically the largest of any cohort, because sessional and procedural fees are high, so the deemed wage base builds quickly.

A worked specialist scenario

Take a Victorian specialist practice with $1,000,000 of employed staff wages and $3,000,000 remitted to contractor specialists. The combined taxable wages reach $4,000,000. Victoria's threshold phases out between $3,000,000 and $5,000,000 of Australian group wages, so at $4,000,000 the deduction is $500,000, leaving $3,500,000 taxable at 4.85%: $169,750.

No relief applies: the GP exemptions in Queensland, Victoria, South Australia and the ACT are scoped to general practitioners, and the NSW rebate is limited to GP services.

Visiting and sessional specialist arrangements

Visiting and sessional specialists raise the 90-day and 180-day relevant-contract exemptions in a way that is specific to this cohort. A specialist attending one sessional day per week for 46 weeks totals 46 days (under the 90-day threshold), because each day on which any service is performed counts as one day, not each hour.

That counting rule can remove a visiting specialist's payments from deemed wages entirely, but it is a factual test that depends on the pattern of attendance, and it should be verified against the jurisdiction's ruling before it is relied upon. Where the specialist attends more frequently, or performs services across a longer part of the year, the exemption may not be available.

The arithmetic of the test is worth working through, because it is easy to misjudge. A specialist attending one session a week for forty-six weeks has forty-six service days and sits comfortably under the ninety-day threshold; one attending three days a week over the same period has 138 days and falls outside it altogether. Because the count is of days rather than hours, the practice should keep a record of attendance days and test them against the threshold rather than rely on the pattern the agreement describes.

A second specialist scenario and the group lever

Take a Queensland specialist practice with $600,000 of employed staff wages and $1,600,000 remitted to contractor specialists, giving $2,200,000 of taxable wages. Queensland's $1,300,000 deduction leaves $900,000 taxed at 4.75%: $42,750. The GP exemption does not reach specialists, so none of that is relieved.

The deduction is a group entitlement. If the practice is grouped with a related entity nominated as the Designated Group Employer, it may pay 4.75% on the whole $2,200,000: $104,500. Because specialist remittances are large, the swing between holding and losing the threshold is correspondingly large.