No change to payroll approach: WA Government

Jolyon Attwooll

20/07/2023 3:21:21 PM

The RACGP WA Chair has been told that most GPs are still considered as ‘contractors running an independent business’.

Happy GP
The news has been described as a ‘relief for GPs' across the state.

 The WA Government will not alter the way it applies payroll tax to general practice, the state’s Deputy Premier has confirmed.
In a letter to RACGP WA Chair Dr Ramya Raman, WA Deputy Premier and Treasurer Rita Saffioti confirmed the WA Government’s approach, saying that most GPs working with independent agreements ‘are considered contractors running an independent business’.
‘The $1 million tax free threshold means the majority are not subject to payroll tax,’ she wrote.
‘The Western Australian Government does not intend to change these provisions.’
The state is not part of the payroll harmonisation agreement for the treatment of contractors that covers other jurisdictions.
Dr Raman said she is pleased that WA is not following other states in attempting to put a further tax burden on GPs.

‘This will be a relief for GPs across our state,’ she said.
‘Practices operate on thin margins, and if they are hit with an additional payroll tax bill, which can be hundreds-of-thousands of dollars, they will be forced to pass the costs on to patients.
‘If patients can’t afford the gap fees, practices will close.
‘This would put more pressure on WA’s already overstretched hospitals. It’s a nightmare scenario, and the WA Government gets it.
‘General practice is the engine of our health system – it keeps people healthy and happy in the community for longer.’
Recent legal decisions in NSW have meant that tenant GPs at some medical practices are being viewed as employees for payroll tax purposes.
After lobbying from the college, the South Australia and Queensland state governments have granted a temporary amnesty on the application of the new approach.
The RACGP WA Chair noted that receptionists, practice managers, GP registrars and nurses are subject to payroll tax if a general practice’s wage bill is above the relevant threshold.
‘We know that audits are a feature of the system, and there will be practices that will have sporadic payroll tax audits as part of the process,’ Dr Raman said.
‘I would encourage any GP or general practice manager who is not sure if an audit is reasonable to contact the state faculty for support, as well as to seek legal advice.’
According to Dr Raman, the WA Government has listened to the college and understood the concerns.
‘Everyone needs and deserves access to high-quality and affordable GP care,’ Dr Raman said. ‘I look forward to continuing to work closely with our state government to this end.’
A newsGP poll suggested that only 3% of general practices could absorb the costs of tenant doctors becoming liable for payroll tax, with 78% of readers saying patient fees would need to be increased.
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