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NEWS

PAYROLL TAX LEVY ON MEDICAL PRACTICES

KEY POINTS

  • From September 2024, the NSW Government will introduce an additional Tax Levy on General Practice
  • Practices, such as ours, will be forced to increase fees to remain sustainable
  • From 1 September, the out-of-pocket cost for a standard consultation will increase by approximately $5
  • We understand the cost of living pressures most people are facing and have tried our best to manage this Tax Levy in the fairest possible way for everyone

 

In June this year, the State Government announced that it would be imposing a significant additional PAYROLL TAX LEVY on all Medical Practices across the state, taking effect from September 2024.

Payroll Tax is a State Government tax paid by businesses on the wages they pay to their employees. This is in addition to PAYG tax that is deducted from employee wages and paid to the Australian Tax Office.

Medical Practices have always paid Payroll Tax on employee wages, as required by the Office of State Revenue, but fees earned by independent GP contractors, running their own businesses, were generally considered to be exempt. Recent reviews by the Office of State Revenue have focused on Medical Practices engaging GP Contractors and have now definitively ruled that GP Contractor earnings are considered "wages" for the purpose of Payroll Tax and must, therefore, be added to the Payroll Tax paid by the Practice to the NSW Office of State Revenue.

This additional TAX LEVY will take a further 10% off Practice Income.

Many Practices already operate on very tight margins and are feeling the effect of increasing costs on rent, electricity and medical supplies. This additional 10% loss in Practice income is just not sustainable and cannot be absorbed by Practices that want to continue providing sustainable high quality health care to patients.

Medical organisations, such as the AMA and RACGP have worked hard over the last 12 months to argue against the additional payroll tax on General Practice, understanding that any increase in Payroll Tax would either see practices close their doors or increase fees for patients - both outcomes likely to impact access to community-based care and potentially sending more patients to already overloaded emergency departments. Unfortunately, the ruling to impose the additional TAX LEVY on Medical Practices has been made and will take effect from September.

The TAX LEVY will be imposed on all fees paid to GPs, including bulk-billed fees, effectively eliminating any gains in Medicare funding for General Practice. Sadly, this means that Practices, such as ours, will be forced to increase fees and further reduce bulk-billing so that we can continue to provide sustainable high quality health care to the community.

We understand that all members of the community are experiencing cost of living pressures and that this additional TAX LEVY for seeing your GP represents another blow.

We will try our best to manage this TAX LEVY in the fairest possible way for all patients. However, if you are concerned about how this TAX LEVY may impact your ability to access General Practice care, please voice your concerns with your State or Federal Government member.

You can search for your State Government member here:

https://www.parliament.nsw.gov.au/members/Pages/all-members.aspx?house=LA

You can search for your Federal Government member here:

https://www.aph.gov.au/Senators_and_Members/Parliamentarian_Search_Results?q=&mem=1&par=-1&gen=0&ps=0

You can contact the Federal Minister for Health here:

https://www.health.gov.au/ministers/the-hon-mark-butler-mp?page=37