Payroll tax update: implications for medical practices in Australia

With recent developments in payroll tax case law, and the various State Revenue Offices' interest in assessing medical practices for payroll tax, practice owners need to consider how they prepare for and manage potential payroll tax liability.

Medical practices' liability for payroll tax

Depending on the way that the legal relationships between practices and independent contractor doctors are set up (and also the way in which the relationships work in reality) a practice may be liable for payroll tax on payments made to independent contractors who are not legally regarded as employees for any other purpose. There should be little doubt that many medical practices would be at risk of being found liable to pay payroll tax on payments made to independent contractor doctors if they are assessed.