Payroll tax relief for Victorian GPs

Victoria’s GPs will soon be exempt from payroll tax on bulk-billed services under amended laws passed by the State Parliament on Thursday.
 
The RACGP has welcomed the move, which will specifically see the exemption from payroll tax for wages paid or payable to GP in relation to bulk-billed consultations from 1 July 2025. 
 
In his speech to Parliament, Victoria Treasurer Tim Pallas said the changes were designed to ‘ease pressures on GPs and give certainty to primary care businesses and the broader sector, supporting GPs and the important work they do looking after Victorians’.
 
RACGP Victoria Chair Dr Anita Muñoz described the change as a ‘very positive move forward’, but said there is still more to be done.
 
‘What this means is that a lot of practices in the state that were facing closure have got an element of reprieve, and so we welcome that, and we applaud the Government for working with us,’ she told newsGP.
 
‘What we also recognise is that we need to follow the suit of Queensland and Western Australia with full exemptions.
 
‘Payroll tax, in the instances where it is applied, will result in higher fees for patients that are not eligible for the triple bulk-billing incentive, and so the businesses will need to pass on the costs of the payroll tax for the non-bulk-billed services they provide, because those businesses cannot absorb that cost.’
 
Victoria’s legislation changes come after Queensland became the first jurisdiction to permanently exempt GPs from payroll tax last month, leading to widespread calls from GPs for other states to follow its lead.
 
Dr Muñoz said the RACGP will continue to ask for a full exemption, and that GPs remain ‘deeply concerned’ about the tax.
 
‘We are concerned that Victoria will lose practitioners to states like Queensland and WA, and we are concerned that our state is a less attractive place to open a clinic and service the community compared to those states,’ she said.
 
‘It’s absolutely self-evident that if there is political will to save the health system, then there is investment in general practice.
 
‘The only reason our health system functions to the degree that it does is because general practice keeps people in the community and out of hospitals.
 
‘If we close those clinics, the impacts on the health system will be so many orders of magnitude greater than what the Government thinks it will get from payroll tax of GP contractors, and there will be potentially irreversible damage to the health system.’
 
In Victoria, practices were offered relief from outstanding or future assessment issued for payroll tax on payments until 30 June 2024. 
 
Eligible Victorian practices can also receive relief for the 2024–25 year, with this applying to businesses which have not already received advice by 22 May 2024 or have not paid payroll tax on payments to their contractor GPs on this basis.
 
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Parliament payroll tax practice closures Victoria