AMA VICDOC Winter 2025 - Magazine - Page 83
PAYROLL TAX ON
MEDICAL PRACTICES:
ADVOCACY WINS,
CURRENT CHALLENGES,
AND THE ROAD AHEAD
ORIGINS OF THE ISSUE
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From 1 July 2025, new payroll tax
obligations1 may apply to many Victorian
medical practices, signalling a potential
shift for those engaging contractor general
practitioners (GPs). Payroll tax liability on
payments to contracted GPs has been a
longstanding source of uncertainty and
concern across Victoria’s healthcare sector.
The issue gained prominence following the
2019 Optical Superstore court decision,
prompting AMA Victoria to raise concerns
in late 2020 about the State Revenue
Office’s (SRO) potential interpretation of the
“relevant contract” provisions in payroll tax
law. Central to our concern was the serious
risk that practices could face retrospective
payroll tax bills going back up to six yearsposing an existential threat to many.
SUSTAINED ADVOCACY DELIVERS
RETROSPECTIVE RELIEF
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AMA Victoria immediately began intensive
advocacy to alert the Victorian Government
and the broader community to these risks.
Our position was clear: the imposition
of retrospective payroll tax bills on GP
contractor payments could irreversibly
damage Victoria's general practice sector
and undermine patient access to affordable
healthcare.
Our efforts included extensive media
engagement, ongoing dialogue with
government officials- including direct
representations to the Treasurer- and
collaboration with key stakeholders such
as the RACGP and other peak medical
organisations.
These sustained efforts delivered a
significant outcome. In May 2024, the
Victorian Government announced that
eligible general practices not already paying
payroll tax on contractor GP payments
would be exempt from retrospective
liabilities. Outstanding assessments up to
30 June 2024 would be waived through
ex gratia relief, and practices would also
benefit from an exemption for the 2024–25
financial year. This decision, secured
through AMA Victoria’s advocacy, shielded
many practices from financial catastrophe
and provided a vital reprieve.
VI CD O C WI NTER 2025
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