Payroll Tax – The Gift that Keeps on Giving

With the continuous stream of updates, news stories and headlines, it can be hard to keep track of what’s current in the world of payroll tax for Medicos. Unfortunately, complacency is no excuse – Medicos need to ensure they are keeping up to date with the changes, or potentially be facing a big tax bill.

A recent public example of a medical business to fall victim to this is Pacific Smiles Group. The dental group has been hit with just under $1 million in payroll tax shortfall and interest for its activities in NSW. Whilst they also operate in VIC, QLD, the ACT and WA, no news has been released about the potential implications in those jurisdictions. In their last announcement in June 2023, they have noted they are considering objecting to the NSW assessments, so we wait to hear the outcomes there.

This is a timely reminder that the impacts of these payroll tax updates can be very real and costly. It is therefore so important to keep abreast of updates in this space and be aware of what tax legislation impacts your business in each state/territory.

While each state/territory operates independent payroll tax legislation, they are all eagerly watching each other, and adjusting where they see fit. Among the guidance in this space are case law precedents (NSW and VIC), rulings released (ACT, NSW, QLD, SA and VIC), amnesties announced (ACT, NSW, QLD and SA), and WA enjoying the saga from the outside. So, unless you operate in WA alone, it just goes to show how complicated the current payroll tax applications can become, particularly if your business spans numerous jurisdictions.

Despite the confusion and chaos, there has been some much welcome relief provided in QLD. The Queensland Revenue Office (QRO) released their updated ruling on 19 September 2023 which, among the various updates, clarifies that payments made from Medicare or patients direct to sole practitioners would not be caught by the payroll tax rules. Thus, QLD medical businesses have been busy contemplating the implications for them, and potential changes to their business models as a result.

While these issues have been creating headlines for around one year now (following Qld’s first ruling on the topic), medical businesses are still grappling with the constant updates and changes. One thing is certain, the payroll tax issue for medical businesses is not going to go away. Getting advice as these payroll tax issues evolve is the best way to protect your business and ensure you are mitigating your risks as much as possible.

Contact Pilot

To ensure you are doing everything you can to protect your business and yourself, contact Angela Stavropoulos or Kristy Baxter from Pilot’s Medico team on 07 3023 1300 or to discuss how the legislation might impact you.