Practice tax check for healthcare professionals

A practice tax check is a structured review of the tax exposures that apply to an Australian healthcare practice: payroll tax registration and thresholds, payments to contractor doctors, grouping and the designated group employer rules, state exemptions, personal services income, GST on health services, and Division 7A. This check scores each area and produces a prioritised action list in about 10 minutes.

Yes. The check is free, needs no signup, and runs entirely in your browser — the answers are never uploaded. PracticeTax is published by eHealth Systems Pty Ltd (ABN 29 647 383 588) and the questions are built on the same verified rates and rules that power the site's calculators.

A typical practice deals with payroll tax (state-based, on wages and many contractor payments), GST and BAS obligations, superannuation guarantee, PAYG withholding, the personal services income rules for practitioner entities, and Division 7A where the practice entity has lent money to directors, shareholders or related trusts. The check above covers all of these areas in one pass.

Often yes. Under the relevant contracts rules, payments to contractor doctors can be taxable wages for the practice even though the doctors are not employees. The Thomas and Naaz litigation confirmed that common GP arrangements are caught, and revenue offices across the states have since made medical practice contractor arrangements a priority audit area.

Thomas and Naaz Pty Ltd v Chief Commissioner of State Revenue was decided by the NSW Supreme Court in 2023 and upheld by the NSW Court of Appeal in April 2024. It held that payments under the practices' doctor arrangements were relevant contracts and therefore taxable wages. It is now the reference point every state revenue office brings to a medical practice audit, which is why agreements drafted before 2024 should be reviewed against it.

Victoria applies a payroll tax exemption for 80% of eligible GP wages up to annual caps, and Queensland excludes wages for eligible GP and specialist services delivered to the public. New South Wales has no GP exemption — a flat 5.45% applies above the $1.2 million threshold. Check the state page for your jurisdiction for caps, eligibility conditions and current dates.

Most state payroll tax laws provide an exemption for services under a relevant contract where the contractor provides services to the practice on no more than 90 days in a financial year. The days are counted across the whole grouped group, the conditions vary by state, and the exemption is lost by assumption — a simple day log per contractor is the evidence that settles it.

Related businesses — those with common owners, directors or trustees, or that use common employees — can be grouped, and a group shares a single payroll tax threshold rather than one each. Only the designated group employer (DGE) claims the threshold, which is why DGE status and the annual election matter for any practice operating through more than one entity.

Where several entities are grouped for payroll tax, the members can elect a designated group employer. The DGE pays payroll tax on the group's combined Australian wages and is the only member that can claim the threshold. A non-DGE member pays tax on its wages from dollar one, so getting the election wrong changes the group's total liability.

Where a practitioner earns most of their income from personal efforts — commonly through a company or trust invoicing the practice — the PSI rules can attribute that income back to them personally unless the entity passes the results test. A documented results test for each practitioner entity is the core evidence, and it should be refreshed whenever the arrangement changes.

Most health services that are Medicare-eligible (or would be) are GST-free under s 38-7 of the GST law, which is why a typical GP practice charges no GST and still claims input tax credits. Most cosmetic procedures, medical reports for third parties such as insurers or employers, and some non-clinical services are taxable. A practice providing a mix of both needs to register and apportion correctly.

At least once a financial year, and always after a structural change: adding a contractor or a location, crossing a wage threshold, forming or joining a group, or changing how practitioners are engaged. The check takes about 10 minutes and flags which answers create exposure.