- Starting in September 2024, the NSW Government will implement a new tax levy on General Practices.
- To maintain our operations, practices like ours will need to raise fees.
In June of this year, the State Government announced that all medical practices in New South Wales would be subject to an additional payroll tax levy, effective September 2024. Payroll tax is a state-imposed tax on the wages businesses pay their employees, on top of the PAYG tax withheld and paid to the Australian Tax Office.
Historically, medical practices have paid payroll tax on employee wages, as required by the Office of State Revenue. However, fees earned by independent GP contractors, who operate their own businesses, were generally exempt. Recent decisions by the Office of State Revenue have concluded that the earnings of GP contractors are to be treated as “wages” for payroll tax purposes. This means that these earnings will now be included in the payroll tax liability paid by practices to the NSW Office of State Revenue.
This new tax levy will reduce practice income by an additional 10%. Many practices already operate with narrow profit margins and are struggling with rising costs for rent, electricity, and medical supplies. This additional 10% reduction in income is unsustainable for practices aiming to continue providing high-quality healthcare.
Medical organizations such as the AMA and RACGP have campaigned over the past year to oppose this additional payroll tax on General Practices, recognizing that such an increase could lead to practice closures or fee hikes—both of which could reduce access to community healthcare and potentially drive more patients to already overburdened emergency departments. Despite these efforts, the decision to impose the tax levy on medical practices has been finalized and will take effect in September. As a result, practices like ours will be forced to increase fees and reduce bulk-billing in order to continue providing sustainable, high-quality care.
We are aware that the entire community is facing significant cost-of-living pressures, and we recognize that this additional tax levy represents another burden. We will do our utmost to manage this tax levy in a way that is as fair as possible for all our patients. However, if you are concerned about how this tax levy might affect your access to General Practice care, we encourage you to raise your concerns with your State or Federal Government representative.
You can search for your State Government member here:
https://www.parliament.nsw.gov.au/members/Pages/all-members.aspx?house=LA
You can search for your Federal Government member here:
You can contact the Federal Minister for Health here:
https://www.health.gov.au/ministers/the-hon-mark-butler-mp?page=37
