No patient "Sick Tax" Fee needed!

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Landmark Payroll Tax Ruling:
Direct GP Banking comes with “tricky” conditions



A Payroll and Income tax-tested solution to avoiding common mistakes of up to $250,000 per practitioner

                                                            The Medical Republic national webinar – 10th October 2023

  Slide Deck: click HERE


                                                                         Quick Self-Assessment Checklist

                             Medical Centres/Practices/Clinics: Employee/Contractor v Tenant Provider Checklist 


                                                                        Practitioner: Contractor Checklist




No patient “Sick Tax” Fee Needed!

Time to turn a problem into an opportunity

Preventable payroll and income tax non-compliance fears are harming practitioner recruitment, retention and access to patient care.

The AMA in the ACT reported this month that a general practice has been contacted by their local ACT Health Services Commissioner Commissioner after a patient had made a complaint about a a practice letter supporting a GP’s fight against the ACT Government’s GP payroll tax. The AMA strongly advised not to use patients to lobby for a payroll tax exemption.

Patients and practitioners require certainty.  

The cost of complying

No practitioner wants to be part of a “Medical Centre” with tax-related issues. Nowadays, many practitioners are inquiring about compliance and requesting independent legal and accounting documentation as evidence. 

The Australian Tax Office also expects this, click here for their recent “Deemed Employee Contractor” ruling. 

No practitioner does not want the Australian Taxation Office (ATO) to cancel their Australian Business Number (ABN) and Goods and Services Tax (GST) refunds on service fees a Medical Centre has charged them.

For a Medical Centre the estimated tax liability for a non-compliance audit for payroll and income tax, spanning over 5 years, can be around $250,000 per full-time equivalent GP practitioner.

This excludes additional charges for penalties (up to double the outstanding liability), interest, accounting, and legal fees. 

To rectify any issue, the costs for resolving the problem are less than 2% of this liability, and ongoing costs amount to less than 0.5% per year thereafter.

There is good news, it is possible to remain compliant

The QLD amended payroll tax ruling affects everyone in Australia. The Ruling places practical context to long-held prevailing High Court and Federal Court laws. As detailed below, the QLD ruling has made it much clearer that it is possible to remain compliant.

After conducting an independent legal and accounting review, there may be some necessary changes to be made. Once these changes are addressed, you can return to your normal practice operations. Everyone must be involved both the practitioners and Medical Centre (“Medical Business”) and or Service Entity “Administrative business” staff. 

How does the QLD Revised  Payroll Tax Ruling affect you?

The QLD amended ruling has doubled the size of the original ruling to 29 pages. It has added 13 New explanatory pages and added 44 new multi-factorial conditions that apply. They are based on correlation and not causation of facts.

Source: Revised QLD payroll tax ruling; Relevant contracts—medical centres Public Ruling PTAQ000.6.2 9 September 19, 2023

The Queensland payroll tax RACGP media reports Direct (Separate) Practitioner Banking payroll tax exemption media reports appear to be dangerously oversimplified.

We have dissected the latest QLD Payroll Tax Changes with some helpful self-assessment checklists and more detailed webinar examples HERE For our FREE national webinar with The  Medical Republic click HERE.

The revised landmark QLD Payroll Tax Ruling published on 19th September 2023, may be adapted in whole or in part by your local State Revenue Office. We highly recommend that all practices and practitioners review their arrangements against this Ruling. 

Many practices are complying but find when they compare themselves to the new (44) examples/criteria they may been either poorly advised or implemented.

No matter where you practice, your arrangements should be reconfirmed against these new criteria.

After all they are legally based on long-held legal principles decided by the High Court and Federal Courts.

Since 1978, this QLD Ruling has confirmed our current Tenant Doctor position. 

It is a landmark Ruling that is not legally binding; the Court has the final say.

The Queensland Ruling Amendment:

  1. Confirms the Tenant Doctor silver bullet (“Administrative business” model) is eligible for payroll tax exemption

  2. Follows many long-held Federal and State Court Rulings

  3. Expect States to follow all if not the majority of the parts of the Ruling

  4. Doubled in size Additional 13 pages

  5. 44 new criteria with clear court-based examples


Key Takeaways

You may need to call your “practice manager” an office manager and your “medical receptionist” a receptionist. 

  1. The Tenant Doctor (“Administrative business”) silver bullet solution is allowed  

  2. Do not advertise yourself as a “Medical Centre” 

  3. Do not attempt to control or influence your doctors including but not limited to how they bill

  4. Direct (Separate) Practitioner Banking is dangerously oversimplified 44 conditions apply

  5. The legality of non-Gazetted State Revenue amensties remains a serious concern


The QLD Ruling has confirmed our long-held view that the Tenant Doctor (“Administrative business”) Model may be the only SAFE WAY forward for payroll and income tax purposes. 

Employing Practitioners is a risky alternative?

There is a legitimate commercial and medico-legal reason why service entities (i.e. based on the Tenant Doctor Model based on the “Administrative Business” solution) have been widely used by practices. 

The alternative is to employ practitioners.  

This may be a riskier model. 

The practice owner(employer) will become vicariously liable for all their mistakes, pay payroll, income tax and superannuation on their earnings and will be subject to Fair Work laws. More supervision and control is required. It will more than likely result in reduced practitioner pay or your practice will not be viable.

Just paying the payroll tax is not a simple solution. It may trigger other employment obligations. 

Be careful of a knee-jerk change; it may trigger up to 5 years of back taxes and penalties with many other regulators. 

Where to from here

1. Educate yourself first click. Click HERE for the article (allow 30 seconds to upload. It is an epic must-read)

2. Ask the right questions: Ask your accountant or adviser in writing for advice. 

3. Please consult a medical and health accountant and lawyer who has been through and successfully defended a payroll tax audit before applying for an amnesty or acting on any advice. 


I sought advice from a patient who was also a Supreme Court judge.

“It is everyone’s responsibility to know, or to find about, the laws pertaining to them.”

He was unsympathetic: “

Ignorance of the law is never an excuse,” he stated

Professor Max Kamien (GP practice owner)

Australian Doctor, 21st July, 2022

Stay humble, curious, hungry and focused.

1. Thinking of applying for an amnesty?



Think again, it may not provide automatic protection read our article below.

The GP Payroll Tax Amnesty: protection or just a clever fishing expedition?

If you are still not sure take the payroll and income tax test below before applying.

2. Need a confidential free Practitioner Recruitment and Retention Payroll and Income Tax checklist?

No time to read and want to quickly work out if you have a problem?

Complete a 15 minute checklist.


a. For Medical Centres/Practices/Clinics: Employee/Contractor v Tenant Provider Self-Assessment Checklist 

b. For Individual Practitioners: Contractor Self-Assessment Checklist


3. Free Practitioner Recruitment and Retention Payroll and Income Tax Webinar

We are honoured to be invited by The Medical Republic to present a practical Tax Ruling supported “silver bullet” solution to your payroll and income tax dilemma. 

TLDR warning

We have dissected the latest QLD Payroll Tax Changes with some helpful self-assessment checklists and more detailed webinar examples HERE For our FREE national webinar with The  Medical Republic click HERE.

Last Updated 7th October 2023

For more insights visit our blog.

About me: David Dahm BA (Acc.), CA., FCPA, CTA, FFin, CPM, FAAPM, FAIM, FGLF.

Chartered Accountant, Chartered Tax Adviser, Registered Tax Agent, Former AGPAL Surveyor 10 years of service

David Dahm is CEO and founder of the national medical and healthcare chartered accounting firm Health and Life and global Founder and CEO of the not for profit project the International Healthcare Standards and Ethics Board (

After a serious work related car accident in 1989, and nine operations later I continue to be a patient and provider advocate. I enter my third decade as a national Chartered Accountant for Medical and Healthcare practices in Australia. I am a former 10-year Australian General Practice Accreditation surveyor. I come from a medico family. I have served on the AAPM national Board and was the inaugural national Chair of the Certified Practice Manager CPM post nominal. I continue to provide accounting tax and practice management advice to many practices all over Australia.

You know who you are and I thank you for this real honour and privilege to serve you and your community through you. Note, I am not a lawyer please seek appropriate legal and accounting advice. This information is for general information and discussion only.

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