VIC and SA payroll tax news provides welcome relief for GPs, but more clarity is needed
23 May 2024 | Minutes to read: 2

VIC and SA payroll tax news provides welcome relief for GPs, but more clarity is needed

By William Buck

William Buck welcomes the new payroll tax announcements by the state governments in Victoria and South Australia that provide much-needed breathing room and temporary relief to general practice owners, but we believe additional clarity is required to help GPs in both states.

On 22 May 2024, the Victorian and South Australian governments made new announcements on each state’s payroll tax exemptions for GPs, providing more detail on how bulk billed consultations will be taxed.

Paul Copeland, Director, Business Advisory at William Buck said that the announcement made by the Victorian government gives GPs some much-needed relief and the breathing space they need during these challenging economic times.

However, he said, while the exemptions are a positive step, the decision to charge payroll tax after the exemption period ends on 1 July 2025 is a complex one, and its ramifications for the healthcare industry must be carefully examined.

“This is a great first step, however GPs in Victoria still need more clarity on how the state intends to proceed, as the current measures do not address the critical issue of the imposition of payroll tax where funds are received directly by the practitioners as advanced in the payroll tax ruling issued by the Queensland State Revenue Office. The idea of payroll tax harmonisation really has gone out the window on this issue,” said Mr Copeland.

“Understanding the practical application of the exemption is crucial, especially since the decision to bulk bill often lies with the individual doctor.”

“It’s important to note that while this decision impacts patient billing, the financial responsibility of payroll tax falls on the clinic.”

While Victoria announced an extension to the exemption until 1 July 2025 after its budget, South Australia’s partial exemption is expected to be part of the state budget to be released on 6 June 2024.

Jennifer Rees, Principal, Business Advisory at William Buck’s Adelaide office said the SA Government’s decision to grant a partial payroll tax exemption on GP earnings is a significant step forward for medical practices.

“This move acknowledges the vital role of general practitioners in our healthcare system and offers a much-needed respite for practices grappling with payroll tax complexities,” said Ms Rees.

“It’s a progressive step that promises to enhance healthcare delivery by encouraging bulk-billing practices, thereby making healthcare more affordable for all South Australians.”

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