Payroll Tax Implications for Medical Practices

Two recent cases in Victoria and New South Wales may have far reaching payroll tax implications for medical practitioners and medical centre operators.  Both cases concerned the arrangements between the owner of the medical centre and the medical practitioner and whether the contractor provisions applied to make the payments received by the practitioner subject to payroll tax.

Critical to the decision in both cases was a determination that under the arrangements the medical practitioner was providing a service to the medical centre.  Although there was an indirect relationship between the provision of services by the medical practitioner and the payments received it was ultimately held that the payments made by each of the centres to the doctors were in relation to the performance of work for payroll tax purposes.

These two cases may have far reaching implications across the medical industry and in some cases may add a significant cost burden to those practices affected that previously have not considered they were liable to payroll tax.  We recommend that all medical practices review their current arrangements in light of these recent decisions.

Should you have any questions or want to know more please contact us (07) 3910 5675 or [email protected]

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