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How Victorian medical practices calculate the GP payroll tax exemption
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Overview
If your Victorian clinic mixes bulk billing and private fees, your billing records can help you work out how much of your GP payroll is exempt. Start with the dollars received for GP work.
Work out the exempt share in dollars
A clinic that bulk bills half its appointments can’t assume half its GP wages are exempt from Victorian payroll tax. Appointment lengths and fees vary. The calculation uses the amounts paid for eligible work, which is why the billing report you give your accountant matters.
From 1 July 2025, a qualifying Victorian general practice can exempt the share of employee and contractor GP wages attributable to fully funded items of GP work. Take the amount paid for fully funded items and divide it by the amount paid for all GP work. Include relevant amounts paid to associated persons and exclude amounts for consumables from both figures. Multiply that fraction by the wages for GP work covered by the rule.
Suppose a practice receives $80,000 for GP work in a month, including $48,000 for fully funded items, after excluding consumables. Its fully funded share is 60%. If the relevant GP wages are $50,000, the exemption covers $30,000. The remaining $20,000 goes into the practice’s wider payroll tax calculation.
Keep the story behind the numbers
Save the billing export that identifies each item, the reconciliation to receipts and the report showing which wages you included. Keep reception and other non-GP wages separate. If your clinic includes dentists or allied health practitioners, review their contracts independently. This particular exemption is for eligible GP work.
