NSW Bulk billing GP clinics given payroll tax concessions
04/07/2024
NSW Bulk billing GP clinics afforded payroll tax concessions in the 2024/25 State Budget, to reduce costs to businesses and families across NSW to help with cost of living pressures.
Bulk-billing support initiative
To counteract the increased cost of living pressures, the NSW government has introduced an exemption and rebate on payroll tax liabilities for payments to contractor general practitioners (GPs) by medical practices meeting the relevant bulk-billing threshold. The relevant bulk-billing thresholds for Sydney and the rest of NSW is 80% and 70% respectively.
In addition, historical unpaid payroll tax liabilities for pre-4 September 2024 payments made to contractor GPs will be exempt from payroll tax. After the 4th of September 2024, medical practices meeting the bulk-billing threshold requirements will be eligible to receive a complete rebate for payroll tax associated with the payments made to contractor GPs.
The aim of this measure is to support accessibility and affordability of health-care by incentivising medical practices to increase bulk-billing to gain eligibility to the rebate. It was projected that this measure is expected to reduce payroll tax revenue for NSW by roughly $180.8 million over the next four years, though the actual impact is likely to be less as medical practices restructure affairs such that the payroll tax obligation does not arise in the first instance.
How SW can help
Medical practices operating in NSW should carefully consider the above changes and how they might take advantage of the upcoming relief initiative. For instance, GP clinics may like to consider the structure of their arrangements with GPs where they meet the threshold requirements, particularly where GPs are engaged as employees.
Some important things to consider are whether the practice is eligible under the bulk-billing threshold requirement as well as reviewing contracts with GPs and the overall billing practices to ensure everything all information is accurately taken into consideration.
For those practices where the measures do not apply, it is worth considering whether and how contractor arrangements may be restructured to reduce adverse payroll tax implications. In addition, it may be worth considering which payments at or around the cut off time may be eligible for the exemption.
