Changes to payroll tax - implications for medical practices in Victoria

From 1 July 2025, a change to the Payroll Tax Act 2007 (Vic) will provide an exemption for ordinary and multi-disciplinary GP medical businesses in Victoria from paying payroll tax in connection with wages or payments paid for work performed in relation to bulk-billed, fully-funded items. Practices will need to review their current payroll tax obligations, and to determine whether their payments to doctors qualify for the exemption under the new clause.

'Relevant contracts'

Under the common law, if a practitioner is engaged as an employee, their wages are subject to payroll tax.

If a practitioner is not engaged as an employee under the common law definition, they may still be deemed an employee for the purposes of the Payroll Tax Act 2007 (Vic) (Act), given the broad definition of a 'relevant contract' under the Act. In the event that these practitioners are deemed employees, any payments made by the practice to the practitioner (including the doctor's