In Australia, payroll tax can be a significant cost in business and particularly for business owners of medical and health centres.
Many such businesses are currently looking towards the future and are wary of taking advantage of payroll tax amnesties offered by some State Revenue Offices across the country.
Each Australian state and territory has its own payroll tax law, with differing payroll tax thresholds. The specific law that applies to a medical centre depends on the state or states in which a medical centre is located.
The table below summarises the key payroll tax figures and the payroll tax rulings, amnesties or concessions that are offered in each state and territory as are relevant to medical centres (as at October 2023). Please note that many of these are only available to general practice medical centres.
| Australian Capital Territory | $2,000,000 | 6.85% | No specific ruling for medical centres | No formal amnesty or concessions. The ACT opposition are pushing for change to legislation for payments made to GPs by medical centres, however, this may be reliant on bulk billing levels. |
| New South Wales | $1,200,000 | 5.45% | PTA 041 released 11 August 2023 | Pause on payroll tax audits for general practices for 12 months which was announced by the NSW Government on 24 August 2023 |
| Northern Territory | $1,500,000 | 5.50% | No specific Ruling for medical centres | No formal announcements or concessions at this time. |
| QLD | $1,300,000 | 4.75%, 4.95% over $6.5M | PTAQ000.6.1 released 22 December 2022 | Amnesty for contracted general practitioners until 30 June 2025, subject to the medical centre acknowledging to the QLD State Revenue Office that it is making payroll taxable payments to GPs. Medical centres must complete an expression of interest by 29 September 2023. |
| South Australia | $1,500,000 | 0%-4.95% up to $1.7M, then 4.95% | PTASA003 released 30 June 2023 | Amnesty for contracted general practitioners until 30 June 2024, subject to the medical centre acknowledging it is making taxable payments to GPs. Medical centres must register by 30 September 2023. |
| Tasmania | $1,250,000 | 4.00% or 6.1% over $2M | No specific Ruling for medical centres | No formal announcements or concessions at this time. |
| Victoria | $7,00,000 | 4.85% or 1.2125% for regional employers | PTA 041 | There are no formal announcements or concessions at this time. PTA 041 may apply retrospectively. |
| Western Australia | $1,000,000 | 5.5% - 6.5% | No specific Ruling for medical centres | WA remains unaligned with the other states in not having broad ‘relevant contract’ provisions. The WA Government has expressed its intention to keep the legislation unchanged. Accordingly, payroll tax risk for medical centres in WA remains low. |
Queensland and South Australian payroll tax amnesties
For parties considering participation in Queensland’s or South Australia’s amnesties, the following will be helpful for you to discuss with your legal adviser in arriving at a decision:
- To be eligible for amnesty, it is important to recognise whether the agreements with the practitioners come under the purview of contracts or not and whether payments to the practitioners are made.
- Consider whether there are payroll tax exceptions that may apply, such as the total number of working days applicable for practitioners.
- To determine the potential financial exposure in case of a payroll tax audit which could cover from the period 1 July 2018 to date. This exercise should factor in interest and potential penalties of up to 75% on any unpaid payroll tax assessed.
- Seek expert qualified professional advice for medical and health centres. If you are unlikely to pass an audit, then participating in an amnesty may be the recommended option. By participating in an amnesty, however, the medical centre must acknowledge that it pays general practitioners.
What a medical centre shouldn’t do is nothing at this point. Pro-active action, even if only seeking expert professional advice, is highly recommended.
How can Burke Lawyers help you in regard to your payroll tax questions?
If this article has prompted questions or you would like to seek the advice in regard to payroll tax from an experienced commercial lawyer in medical and health contact us today on +61 3 9822 8588 or email HERE.
