Recent developments around payroll tax for GPs have caused some concern among psychologists working in private practice, with questions around the implications for our profession.
There is concern about a ruling earlier this year in the NSW Civil and Administrative Tribunal, which reportedly led to some health practitioners namely doctors receiving retrospective tax bills.
Payroll tax is not a Commonwealth tax, and it is not administered by the Australian Tax Office. It is a state-based tax administered by the respective offices of state revenue.
Payroll tax rates and thresholds vary between the states and territories. The following table outlines the indicative thresholds and rates.
|
State / Territory
|
Rate
|
Threshold (annual)
|
|
ACT
|
6.85%
|
$2,000,000
|
|
New South Wales
|
5.45%
|
$1,200,000
|
|
Northern Territory
|
5.50%
|
$1,500,000
|
|
Queensland
|
4.75%
|
$1,300,000
|
|
South Australia
|
4.95%
|
$1,500,000
|
|
Tasmania
|
4.00%
|
$1,250,000
|
|
Victoria
|
4.85%
|
$700,000
|
|
Western Australia
|
5.50 – 6.50%
|
$1,000,000
|
Source: https://www.payrolltax.gov.au/resources
Psychologists who are running a business and employers are urged to take time to understand how payroll tax could apply to contractual and commercial arrangements with practitioners who operate from their clinics.
If you need specific to your situation, please seek professional advice from appropriately qualified accounting and legal advisors.
Further reading:
Payroll Tax Australia - https://www.payrolltax.gov.au/resources
Russell Kennedy Lawyers - Health Alert - Payroll tax concerns for medical and healthcare providers
The Royal Australian College of General Practitioners - What do practice owners need to know about payroll tax?