Payroll tax for medical centres – An uncertain prognosis

Until last week, the payroll tax prognosis for medical centres seemed to have some clarity. The Revenue Offices in both NSW and Queensland seemed to have settled on policies that payments made by medical centres to health practitioners were subject to payroll tax in qualifying circumstances. However, a segment in an ABC Radio news program in Brisbane last week has left that status in doubt.

ABC News reported last week that the Queensland and NSW Governments were in discussions about giving medical centres a payroll tax grace period.  The Queensland Government is planning to make an announcement that there will be a deferral of implementation of the payroll tax compliance obligations that certain medical centres have.  Medical centres would need to apply for the proposed “amnesty" and, at the time of writing, the suggested announcement has not been forthcoming.

As highlighted in our earlier article, a series of court cases in Victoria and NSW from 2019-2022 have decided that typical medical centre structures result in a payroll tax liability for the payments made to health professionals in addition to the salaries paid to the administrative staff.  Revenue NSW has been identifying affected practices via audit processes and applying payroll tax back to 2019.  By contrast, shortly before Christmas 2022, Queensland Revenue Office issued a public ruling stating that it would apply payroll tax to the payments from now on.

Mazars does not believe either Revenue Office will waive the liability entirely.  Rather, we see two possibilities being:

  • A generous tax payment start date and repayment arrangements will be implemented to ease the cash flow burden for medical centres – which in many cases will be a necessary, temporary measure to ensure a medical centre survives, and
  • An acceptance that payroll tax does not apply where the health practitioner receives payments from patients and Medicare directly – that is, recognition that the medical centre bi-pass has been successful.

Mazars is closely monitoring this field and will keep you informed of developments.

If you have any queries please contact your usual Mazars advisor or alternately one of our experts via the form below or on:




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Author: Stephen Baxter

Published: 6/2/23

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