Queensland goes it alone on payroll tax holiday

5 minute read

No other jurisdictions have followed suit so far in offering a temporary amnesty to practices.

As fears grow over the viability of GP practices to withstand a payroll tax audit, state revenue bodies are reluctant to show their hands.

The panic was sparked by the NSW Thomas and Naaz case, which clarified that most contractor doctors at a medical centre should be considered practice employees under some circumstances.

Earlier this week, the NSW Court of Appeal threw out an application to appeal the decision, confirming that the clinic was liable to pay several years’ worth of payroll tax on those doctors.

Across most states, the tax amounts to 5% of clinic turnover.

RACGP president Dr Nicole Higgins called the decision to throw out the appeal “the latest nail in the coffin” for patient access to general practice.

“Practices already pay payroll tax like everyone else on staff including nurses and administrative workers, but this new tax obligation on tenant GPs is untenable,” Dr Higgins said.

“Unless governments act to exempt practices from this new obligation patients will be charged more, and some clinics will be forced to shut up shop.”

In December, the Queensland Revenue Office released a public ruling on the matter confirming that it would be applying the same interpretation of contractor provisions as NSW.


About six weeks back, under pressure from doctor groups and the media, the Queensland government announced a two-and-a-half-year grace period for medical centres which were unaware that they were breaching tax laws.

This gives Queensland-based GP clinics until the start of the 2025-26 financial year to restructure their business model and get it payroll tax-compliant.

The catch is that Queensland practices wanting to apply for this amnesty need to draw attention to themselves by registering with the revenue office by the end of June this year.

Time is running out to save general practice care. The Sick Tax will leave practices with two options – hike fees or close. The states and territories must provide a full exemption from payroll tax for tenant GPs. Otherwise, bulk-billing will be a thing of the past.

Western Australia

WA is the odd one out, in that it doesn’t share the harmonised contractor provisions of the eastern states, which means that the Thomas and Naaz precedent doesn’t automatically apply there.

“The NSW tribunal decision that contractor GPs are in fact medical practice employees for payroll tax purposes does not flow on to GPs operating as contractors in WA,” a government spokesman said.

“As such, this is not an issue in WA that requires action.”

The spokesman even confirmed that most GPs working in a medical practice in WA are generally considered contractors running an independent business.


Just before announcing the grace period, Queensland Treasurer Cameron Dick was reportedly in contact with NSW Treasurer Matt Kean on the issue.

So far, however, the state has not committed to following Queensland’s lead by granting any form of amnesty.

When asked directly about whether there were plans to implement a payroll tax grace period, the NSW government gave The Medical Republic a somewhat indirect response.

“We have been engaging with stakeholders, including the Australian Medical Association, RACGP and Primary Care Business Council, to understand the impact of the legal precedent set by the Optical Superstore and Thomas & Naaz court cases,” a government spokesman said.

“The NSW government is assessing the implications for general practices and will continue to work constructively with all relevant stakeholders.”


The word out of Tasmaniawas similar – the Department of Treasury and Finance confirmed with TMR that it would be applying the Thomas and Naaz case law to contractor GPs and said it was unaware of any proposals to amend the Payroll Tax Act.

“The Department of Treasury and Finance is not aware of any issues for Tasmanian GPs and other medical professionals generated by these [recent case law] decisions,” a spokesman said.

“Whether a GP clinic that contracts with GPs is liable for payroll tax is entirely dependent on the individual facts and circumstances relevant to those arrangements.”

The AMA wrote to Tasmanian members last July saying they were probably off the hook for payroll tax, which didn’t seem a great idea at the time.

The department recommended any GP clinics that were concerned they may be liable for payroll tax contact the Tasmanian State Revenue Office directly.


A spokesman for the Victorian government told TMR that the state would continue to assess payroll tax the same way across industries and professions, and that there have been no changes to the law or the way it is applied.

Victoria’s State Revenue Office has engaged with the AMA and RACGP on the matter already, it says.

(This response has taken TMR a full six weeks to obtain. Enjoy it.)

South Australia

SA’s Treasury Department also said that its records show medical practices have been paying payroll tax consistent with the long-standing payroll tax treatment of contractors.

Northern Territory

The NT Department of Treasury and Finance told TMR it had aligned its position with that of Queensland, but is not offering a holiday.

Its official position is that medical clinics with contracted GPs are in the payroll tax base, but that each case will be assessed on the relevant facts.

“At this time, no Northern Territory medical clinics have identified that the outcome of the case and the application of payroll tax is an issue for them,” a spokesman said.

“This matter is subject to ongoing monitoring, and state and territory revenue offices are liaising closely.”


The territory simply told TMR that it was not currently considering a Queensland-style agreement.

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