Payroll tax abolishment moves forward

Queensland is on track to become the first state to scrap payroll tax on GPs permanently, with its new Government this week instructing Treasury to start work on the change.
 
It comes as the recently elected State Liberal National Party Government follows through on its election commitment to abolish the tax within its first week in office.
 
Queensland was the first state to rollout a payroll tax amnesty to prevent practices going bankrupt due to retrospective tax, with many other states following suit since.
 
It was also the first state to ensure patients’ fees paid directly to a GP for that GP’s services were not subject to the tax.  
 
RACGP Queensland Chair Dr Cath Hester welcomed the news, after years of sustained advocacy from the college.
 
‘The RACGP has long advocated for this tax to be abolished, and I’m thrilled the Crisafulli Government has instructed Treasury to do so,’ she said.
 
‘This will help to ensure essential GP care stays affordable for Queenslanders, and practices can remain viable and keep their doors open for patients.  
 
‘It’s also a big relief for GPs across our state, who just want to get on with their job helping Queenslanders stay healthy and out of hospital and reducing pressure on our health system.’
 
The state’s Labor Party had also committed to scrap the tax if it held power, meaning Queensland was to become the first jurisdiction to make the change regardless of who won the October election.
 
Dr Hester said with Queensland taking action, it is now time for all other states and territories to follow its lead.
 
Currently, each jurisdiction has differing rules around the tax, with some offering amnesties, and others never implementing it in the first place.
 
Australian Capital Territory
In the Australian Capital Territory, its re-elected Labor Government recently promised to introduce measures to exempt income earned by GPs for bulk-billed services from payroll tax liabilities from 1 July 2025.
 
New South Wales
In New South Wales, a 12-month pause of payroll tax audits lifted with the introduction of a Bulk Billing Support Initiative, with audits starting again on 4 September 2024.
 
Under this initiative, a rebate is available to medical centres making payments to contractor GPs, with clinics eligible to receive payroll tax relief if they meet certain bulk-billing thresholds.
 
Victoria
In May, the Victorian Government announced general practices in the state would receive an exemption from any outstanding or future assessment issued for payroll tax up to 30 June 2024.
 
A further 12-month exemption, through to 30 June 2025, will be available for any practice which has not already received advice and begun paying payroll tax on this basis.
 
Additionally, legislation has been introduced into Victorian Parliament which, if passed, will introduce an exemption payroll tax for wages paid or payable to contractor GPs and employee GPs in relation to bulk-billed consultations from 1 July 2025. 
 
South Australia
As of 1 July, this year, wages earned by South Australian GPs for bulk-billed services are exempt from payroll tax, following a State Government announcement in May.
 
Tasmania
The Tasmanian Government has never implemented the tax and has promised ‘there will be no change to the existing payroll tax arrangements’.
 
Western Australia
In July 2023, the State Government confirmed it will not alter the way it applies payroll tax to general practice, with the Deputy Premier saying ‘the $1 million tax-free threshold means the majority are not subject to payroll tax.’
 
Northern Territory
According to the RACGP Northern Territory Faculty in 2023, payroll tax ‘has not arisen as a topic for concern’ for the Territory.
 
Log in below to join the conversation.

payroll tax practice closures Queensland