Updated Queensland payroll tax ruling for medical and healthcare providers
Updated Queensland payroll tax ruling for medical and healthcare providers
No payroll tax on direct to doctor payments & amnesty registration period extended
On 19 September 2023, the Queensland Revenue Office (QRO) issued a revised payroll tax ruling in relation to medical centres, PTAQ000.6.2. The updated ruling follows Treasurer Cameron Dick’s announcement in parliament, that under normal business arrangements, patient fees paid directly by a patient or Medicare to a General Practitioner (GP) for that practitioner’s services, will not be subject to payroll tax. This includes the Medicare benefit and any out-of-pocket expenses.
The original payroll tax ruling indicated that payroll tax is likely to be payable on payments from a medical centre to a practitioner under a service or facilities agreement, as contractor payments.
One of the key questions many practitioners and advisors were left with was whether payments made directly from Medicare or from patients to practitioners would be captured as deemed taxable wages. The revised ruling clarifies the Commissioner of State Revenue’s view. The key takeaways are that:
- Medicare benefits assigned by a patient to a practitioner and paid directly to the individual practitioner from Medicare and patient fees paid directly to an individual practitioner from a patient will not be deemed wages, even where there is a relevant contract between the practitioner and medical centre.
- Where there is a relevant contract and no exemption applies:
- If Medicare benefits or patient fees are paid directly to a practitioner entity and the practitioner entity pays a portion to the practitioner and a portion to the medical centre (as a service fee), the payment from the practitioner entity to the practitioner will be a deemed payment of wages from the medical centre to the practitioner.
- Payments made to practitioners or their entities via medical centres or third parties (other than patients or Medicare) will be deemed wages. The Commissioner of Revenue’s position on these scenarios has not changed.
The revised ruling applies to all medical practitioners, not just GPs. The ruling applies both retrospectively and moving forward as it does not reflect a change in law, but clarifies the Commissioner of Revenue’s interpretation of the relevant provisions.
Victoria, New South Wales and ACT have issued payroll tax rulings that are inline with the original Queensland ruling. These jurisdictions are yet to announce whether their rulings will be updated in accordance with the revised ruling in Queensland.
Extension of amnesty
Expressions of interest for the Queensland payroll tax amnesty for GPs was due to close on 29 September 2023 but has now been extended to 10 November 2023. The amnesty applies to medical centres with GPs until 30 June 2025.
Contact us
BDO has extensive experience in payroll tax for medical centres and practitioners and is here to assist you in navigating payroll tax as it applies to you. If you have any questions regarding this article or would like assistance with any of the above, please contact a BDO tax specialist.