Commissioner's Practice Note CPN 036 - Relief to Medical Centres Release Date: August 23, 2024 The NSW State Government has finally released details on the previously announced payroll tax relief measures, which medical practices may choose to implement from 4 September 2024. In this post, we’ll break down what’s new, how it works, and what you need to know to make sure your medical practice is making informed decisions in relation to the application of the rebate and payroll tax registration. Available Relief The relief comes in two main forms: Exemption : Medical centres will receive an exemption for any unpaid payroll tax due on wages paid or payable to relevant GPs before September 4, 2024. Rebate : A rebate will be available for payroll tax on wages paid or payable to GP contractors on or after September 4, 2024, provided specific conditions are met. How the Rebate Works The rebate is designed to reduce the payroll tax impact in medical practices where GPs work under relevant contracts and where there is a high bulk billing percentage. To qualify for the rebate, medical practices must meet a certain threshold of bulk billing services for the financial year. The required threshold is 80% for practices in Sydney Metro and 70% for those in other areas of NSW. The rebate, if eligible, will be a direct reduction in taxable wages for qualifying GP payments. Detailed Eligibility Criteria - % thresholds Understandably, medical practices are keen to calculate their eligibility for the rebate and where they sit percentage-wise concerning the 70% or 80% threshold. Below are the key details you need to know before calculating your percentage: Practice-Level Calculation : The relevant proportion of bulk billing services is calculated at the practice level, not at the level of individual practitioners. Service-Based Calculation : The calculation is based on services (commonly referred to as "items") rather than the number of appointments, consultations, or billing values. Registrar Services : Services provided by registrars (trainees) are excluded from the percentage calculation. Employee Doctors : Services provided by doctors who are engaged as employees are included in the calculation; however, the wages paid to these doctors do not qualify for the rebate. Location-Specific Calculation : The rebate is location-specific, meaning that medical practices operating multiple sites may find that payments to GPs are exempt at one location but not at another. Apportionment : If a GP works across multiple sites, the rebate may be apportioned if the relevant percentage for exemption is not met at each site. Included and Excluded Services The following table summarises which services are included in the total service count and which are eligible for the rebate: Service Type Total Service # A Rebate Eligible Service # B Bulk Billed Medicare Services Yes Yes Department of Veterans Affairs (DVA) Services Yes No WorkCover Services Yes No Privately Billed Services Yes No Non-Medicare Services (e.g., Overseas Visitors) Yes No Calculating your Relevant Proportion % The formula to calculate your percentage, referencing the columns above, is: Rebate Eligible Service (B) # divided by Total Service (A) # *Remember that registrar services are not included in the total service numbers, and separate calculations are required for providers working across different locations. Hot Tip: To obtain data, BP Software users can consider reviewing the report " Patient Contact and Billing Statistics—Individual Locations ." Example - Calculating the Rebate Amount The rebate amount for a financial year is determined by comparing the payroll tax payable with and without the inclusion of relevant GP wages. Example: Rebate Calculation (Example 10 from CPN 036) ABC Pty Ltd (the employer) is a medical centre that lodges and pays payroll tax monthly and it only pays wages in NSW. For November 2024, its wages were $550,000 of which $150,000 were relevant general practitioner wages. The threshold for the period would be: 30/365 x $1,200,000 = $ 98,630. Tax calculation including relevant GP wages ($550,000 - $98,630.14) x 5.45% = $24,599.66 Tax calculation excluding relevant GP wages ($550,000 - $150,000 - $98,630.14) x 5.45% = $16,424.66 The rebate is calculated on the difference $24,599.66 - $16,424.66 = $8,175 In this example, $16,424.66 of payroll tax is ultimately payable to Revenue NSW for the month. Next Steps It is important to note that this relief is for businesses that engage with doctors under relevant contracts. We suggest each practice obtain professional advice from specialised lawyers and accountants to determine its structure and whether there are alternate options or interpretations regarding its payroll tax obligations. Further, it is important to consider whether your practice will continue to meet the threshold criteria in the future and how this may impact future payroll tax liabilities. With the shift toward private billing to support practice sustainability, many medical practices will find it difficult to meet the 70% or 80% bulk billing threshold. After advice and consideration, if you want to take advantage of the NSW Payroll tax relief measures and are over the payroll tax registration threshold (including deemed payments to GPs), you must register for payroll tax and commence reporting taxable wages and GP-exempt wages. For practices that do not operate in the GP space or do not meet the relief criteria, it is time to consider alternative options, including your ongoing structure of operations, options for surcharges, and cash flow measures to cover any potential payroll tax liabilities. Conclusion The amendments introduced by the NSW State Government will offer some relief to eligible General Practices; however, with the industry's shift toward private billing, the number of eligible medical practices may be smaller than originally anticipated. Contact our team today for further advice or other specialised health accounting services.

I am excited to extend an exclusive invitation to the free online GP Success Summit 2024 for Australian General Practice Owners and Practice Managers. In the upcoming two weeks, immerse yourself in five meticulously curated sessions right from the comfort of your home or practice to equip you with the tools for scaling your practice and setting you up for success. Please save the date for July 8th. As a speaker in the first session at 7.30 pm, I look forward to joining esteemed experts to lead a conversation about planning. Our discussion will cover vital aspects of achieving growth, sustainability, and ultimate success for your general practice. Can’t make the live sessions? We have you covered; everyone who registers will receive access to the custom-built replay portal and podcast replay.

You are invited to join me in a panel discussion with the team at Best Practice Software to help you navigate payroll tax changes and announcements across all states and territories. It will be an opportunity to examine the recent announcements in depth, reflect on the ongoing changes in this space, and consider how they may affect your practice. Register below.

The Victorian and South Australian Governments recently announced updated information on how they intend to treat payments made to General Practitioners (GPs) for payroll tax assessment purposes. What We Know - Victorian Announcement A 12-month exemption up to 30 June 2025 for General Practices who are yet to begin paying payroll tax on payments to GPs. An exemption for these practices from retrospective assessment on payments to GPs up to 30 June 2024. An exemption for payments to GPs that relate to bulk billed consultations from 1 July 2025. What We Know – South Australian Announcement An exemption for payments to GPs that relate to bulk billed consultations from 1 July 2024. The exemption will apply to all GP practices, regardless of whether their GPs are engaged as employees or deemed contractors. Key Points - Our Understanding Only payments to contractors and employee GPs related to fully bulk-billed consultations will be considered exempt. Consultations that are not completely bulk billed are not considered exempt – we believe this will apply to the whole consultation fee not only the private gap payment. It is unclear in Victoria at this stage as to how private and non-bulk billed payments that are paid directly from the patient to the GP’s own bank account will be treated – we advise a cautious approach and suggest that these will remain taxable. Both State's approaches differ from the current guidance in Queensland where, generally, payments that flow from patients to the GP directly will not be considered taxable wages. How to Estimate Exposure – (based on the South Australian method) The calculation for payroll tax liability is not straightforward and involves various thresholds and reducing offsets, however, a simple methodology to estimate your potential payroll tax exposure is below: Calculate Payments to GPs Calculate monthly patient income (per doctor) Exclude GPs that fit one of the exempt classifications Multiply the patient income amount by the relevant “payment” percentage (calculated as 1 -  Service Fee %) e.g. 1- 30% = 70% “payment” percentage Calculate Exemption Percentage Calculate the total number of bulk billed items as a percentage of total number of all billed items Apply Exemption Percentage Apply the exemption percentage calculated to the payments to GPs Apply Payroll Tax Rate Multiply the above amount by the relevant current payroll tax rate in your state Victoria – 4.85% Victoria Regional – 1.2125% South Australia – 4.95% Result The result will approximate your estimated monthly payroll tax liability in relation to GP payments *Note that we are yet to receive full information on the implementation of the newly announced exemptions. The above methodology is for informational purposes only. For an accurate calculation involving your specific circumstances, state threshold and rates please reach out to your accountant, or to us at GrowthMD. Tools to Assist Information relating to non-bulk billed GP consultations can be obtained from your Practice Management System. For those practices currently using Cubiko , you will easily be able to access the information required to calculate your payroll tax exposure directly from your Cubiko dashboards. Important Considerations & Actions Commence planning for your practice’s future. We suggest modelling the financial benefits of bulk billing (with the associated benefit of the exemption), versus private billing (where GPs can set commensurate, viable fees for the care and service they provide). For many practices, these exemptions will not substantially impact their position on bulk billing or payroll tax moving forward. Remember that not all non-bulk billed payments to GPs will necessarily be taxable wages for payroll tax purposes. You will need to consider the structure of your practice, current agreements with GPs, the nature of your business operation and any relevant contractor exemptions that may apply. We greatly caution practices and GPs against making knee-jerk changes such as altered billing policies, restructures, banking arrangement changes etc without obtaining professional advice. It is imperative to understand all the information when it becomes available and once passed as law. This may not be for some time. How GPs are engaged with a practice or service entity not only impacts payroll tax exposure but also other areas such as superannuation and personal income taxation. Before making any changes to arrangements seek advice as to the wider taxation and employment landscape. How GrowthMD can assist We strongly encourage you to talk to your current accountant and legal adviser to obtain advice about how these changes may affect your practice. Alternatively, you can contact the team at GrowthMD to provide insights on these changes, along with other specialist advice for your practice.

Our specialisation in medical practices provides robust data to benchmark your medical practice effectively. We are excited to share the 2024 benchmarking insights revealed during our recent online event, exclusively for you and your medical practice. You are the first to witness this invaluable insider information, which includes: Measuring profit for medical practices Practical tips for setting accurate targets and budgets Key traits in profitable practices New benchmark data on practice running costs Don't miss out on gaining essential benchmarks and improving your practice's performance.

I had the opportunity to participate in the Digital Health Festival in Melbourne, and I'm excited to share insights and takeaways from the event. It is the only place where the entire health ecosystem meets with a focus on technology as a tool for enhanced patient outcomes and productivity. Recognised as Australia's premier health technology event, the Digital Health Festival attracts over 6,000 health leaders. It provides a dynamic platform for the exchange of innovative ideas and the formation of strategic partnerships. This collaborative group of health leaders meet to spark new ideas, form new partnerships, and, together, change the future of healthcare. The prevailing theme revolved around Generative AI. The applications of Generative AI spanned across various facets of healthcare, from patient segmentation to compassionate communication, making a substantial impact on the industry and its workflow. A particular highlight for me was witnessing a powerful affirmation from Danielle Bancroft of BP Software that "technology is not the problem." This resonated deeply with my own experiences, shunning the misconception that technology is the primary obstacle in healthcare advancements. Beneath the surface of the festival's content, I found invaluable connections and conversations with industry professionals, which underscored the true essence of the event - networking and sharing real-life experiences in healthcare. With the promise of new insights and strategies to bring back, I am eager to attend the Digital Health Festival again next year and share the learnings with both you and my clients over the coming months.

Well, it is that time of year again when you, our clients, get to leverage our depth of knowledge on all things tax for healthcare professionals. In this video, I give you some critical advice to ensure we give you the best advice for your situation.

The Touchstone General Practice Industry Report draws from benchmarking data spanning 811 practices across Australia, offering a comprehensive exploration of industry trends, including general practice benchmarks. Analysing factors like practice performance, billing methods, and patient experience, the report provides invaluable insights into the standards and performance metrics within the general practice landscape. Download the report below 👇. Cubiko has produced the 2023 Touchstone General Practice Industry Report, prepared for general informational purposes only and not intended to be relied upon as accounting, tax, or other professional advice.

In the first months of 2024, we have seen a sharp increase in demand for our advice and implementation services from practices wanting to take action and minimise payroll tax exposure risk. In this video, I talk about the latest QLD ruling (Feb 2024) and give an overview of the relief offered by various Australian states and territories. Is your practice ready to take action on payroll tax compliance and risk minimisation? If so, please get in touch with us to schedule a discovery meeting.

Many new clients to GrowthMD have made the change because they seek a more proactive and rewarding relationship with their accountant. What does a proactive relationship with your accountant look like? In this video, I take you step by step through our End of Financial Year client advice process - so you can see what a proactive relationship looks like and how it can benefit you and your business.