Due to a global Microsoft outage, we are experiencing technical difficulties that may make it hard to reach us.

Accredited medical practices and payroll tax - Potential impacts on patient care and accreditation

Justin Fung, Avant Law - Partner, Head of Commercial & Corporate | General Manager

Thursday, 14 July 2022

medical payroll tax

Key takeaways

  • Medical practices need to carefully consider how they will continue to structure their operations in light of recent and significant payroll tax decisions in the healthcare sector.
  • Any restructure of medical practice operations should consider the impact this mayhave on the delivery of patient care.
  • This impact on the delivery of patient care may have flow on effects for accredited medical practices, including their ability to maintain accreditation and the continued receipt of Practice Incentive Payments.


One possible implication from these recent decisions is that medical practices should consider whether healthcare practitioners should be owning and controlling the use of medical records of patients who may visit the practice from time to time. This would include practitioners having the right to remove such medical records when they depart the practice.

The suggestion is that, taking such an approach (among other considerations) to medical records could support the characterisation that practitioners are not ‘deemed employees’ for the purposes of payroll tax and therefore mean that practices would not be required to make the payroll tax contributions in this regard to the relevant revenue authorities. By way of example and in summary, the current initial threshold for payroll tax in New South Wales applicable from 1 July 2022 is $1.2 million, levied at 5.45% (so, approximately $65,000). But there are questions to consider, including: 

  • What does this practically mean at the operational level? Should the practice go down the route of providing every departing practitioner with all a full electronic record of all patients whom that practitioner has seen?
  • What happens if multiple practitioners have seen a particular patient over a period of years? Should the practice be required to provide the departing practitioner with those types of records created by other remaining practitioners?
  • What about getting patient consent to provide all their patient records to the departing doctor?

Broader implications

Further, adopting the above approach to the ownership of medical records has broader implications for practices, especially those which may be accredited. For example, many large practices across the country (from where thousands of healthcare practitioners consult) are accredited against the RACGP Standards for general practices (5th edition) (Standards). One of the key principles underpinning the framework which supports the Standards is the prioritisation of “holistic, person-centred healthcare

Now, if medical practices were to take the view that healthcare practitioners who consult from their premises should be able to control the use of medical records (including removing those records on departure), a question will arise as to whether such a view could in fact result in a medical practice compromising its ability to meet the Standards for accreditation.  

There are flow-on effects in this scenario. Notably (and as you many of you will already know), for medical practices must be accredited, or registered for accreditation, to participate in the Practice Incentives Program. Practice Incentive Payments remain a valuable and significant source of income to support the operation of accredited practices across the country.

In summary. Medical practices will need to carefully consider how any changes they make to their operations in light of the recent payroll tax decisions may impact the delivery of patient care and accreditation.  

We can help you

If you have any questions, or would like more information about how we can assist you or your practice, please call 1800 867 113, or to organise a confidential discussion at a time that suits you, please click here 

About the author

Justin Fung

Justin Fung is a lawyer and the Head of Commercial and Corporate in our Avant Law team. Justin has over 15 years’ experience advising in commercial, corporate, risk, compliance, governance, regulatory enforcement and dispute resolution and advises clients in the private and public sectors. He was previously General Counsel of a national allied health group of companies and held Group and Divisional Head of Legal roles in a major ASX-listed health company, whose operations covered medical and dental centres, allied health, pathology, diagnostic imaging, assisted reproductive technologies, day surgeries and hospitals. Prior to these in-house legal roles, Justin was an Executive Counsel with the global law firm Herbert Smith Freehills where he practiced for over 10 years.


The information in this article does not constitute legal advice or other professional advice and should not be relied upon as such. It is intended only to provide a summary and general overview on matters of interest and it is not intended to be comprehensive. You should seek legal or other professional advice before acting or relying on any of this content. The information in this article is current to 15 July 2022. Liability limited by a scheme approved under Professional Standards Legislation. Legal practitioners employed by Avant Law Pty Limited are members of the scheme. © Avant Mutual Group Limited 2024

To Top