GP Payroll Tax 2026: State-by-State Status After the Amnesties Ended

Key Takeaways

• Queensland has the strongest position: from 1 December 2024, wages paid by a medical practice to a GP (employee or contractor) are exempt from payroll tax under an administrative arrangement. The exemption was made permanent in section 14 of the Payroll Tax Act when the Revenue Legislation Amendment Bill 2024 passed on 21 February 2025.
• Victoria introduced a partial exemption from 1 July 2025 for wages paid to employee and contractor GPs in proportion to "fully-funded" work (bulk-billed Medicare items, Medicare incentive payments, and vaccine consumables). Privately billed work remains taxable. Historical exposure before 1 July 2025 was covered by Treasurer's ex gratia relief.
• Australian Capital Territory moved from a 65% bulk-billing threshold amnesty (closed 30 June 2025) to a permanent exemption from 1 July 2025 covering wages paid to GPs (employee or contractor) for bulk-billed, DVA Part V, and Workers Compensation services. The 65% threshold was removed in the permanent version.
• South Australia ran an amnesty for the period 1 July 2018 to 30 June 2024 (registration closed 30 November 2023; payroll tax registration required by 30 June 2024). From 1 July 2024 a bulk-billed-only exemption applies. Practices that missed the amnesty registration window have full retrospective exposure for the amnesty period.
• New South Wales offers a rebate (not an exemption) under the Bulk Billing Support Initiative from 4 September 2024, conditional on bulk-billing thresholds of 80% in metropolitan Sydney and 70% in regional NSW. Practices below threshold pay the full payroll tax on relevant contracts.
• Western Australia does not apply the "relevant contracts" provisions to medical practices; assessment is on the common-law totality of the relationship. Tasmania has no enacted exemption despite cross-party election commitments. Northern Territory has no medical-specific guidance but a $2.5 million threshold (the highest in the country) means many practices fall below it.
• The contractor-GP payroll tax wave that began with the 2021 NSW Thomas and Naaz decision is now a divergent permanent landscape. Practices in NSW, SA, VIC and ACT remain exposed if their bulk-billing percentage falls below the relevant threshold, and the eastern-state amnesties have closed, so retrospective assessments are live.

In 2026, where your medical practice sits on payroll tax depends almost entirely on which state revenue office regulates you. Queensland has a clean permanent exemption for GP wages. Victoria, the ACT and South Australia have bulk-billed-only carve-outs. NSW offers a conditional rebate tied to bulk-billing thresholds. WA uses a different framework altogether, and Tasmania remains unresolved. The amnesty era is over; from 1 July 2024 onwards every state expects compliance with the regime that now applies to it.

How did medical practice payroll tax become a problem in the first place?

For four decades, most Australian general practices operated as service-entity models. The practice owned the premises, employed the reception and nursing staff, ran the appointment system, and collected the patient fees. The GPs worked as independent contractors, each with their own ABN, billing Medicare in their own right, paying the practice a service fee (typically 30 to 40% of billings) in return for facilities and administration. Practices accounted for this on the basis that the GPs were not employees, so the contractor payments were not "wages" for payroll tax purposes.

That assumption was tested and broken in NSW in 2021. The Thomas and Naaz Pty Ltd v Chief Commissioner of State Revenue decision held that the contracts between the medical centre and its contractor GPs were "relevant contracts" under the harmonised payroll tax legislation, which meant the payments the practice made to the GPs were "wages" for payroll tax purposes. The NSW Court of Appeal upheld the decision in 2022. Other state revenue offices began applying the same analysis, and within 18 months thousands of medical practices around Australia were staring at large retrospective payroll tax assessments going back five years or more, plus interest and penalties.

The political response was state-by-state. RACGP, AMA and the Australian GP Alliance lobbied for relief; revenue offices issued amnesty arrangements to give the sector time to register and self-assess; legislators then carved out permanent positions. By mid-2026 the result is a divergent permanent landscape, not a single national rule, and the conditions attached to each state's relief vary enough that the same practice in two different states would have two very different payroll tax bills.

State-by-state status in 2026

The table below is the single-page reference. Each row links to the relevant state revenue office page for the authoritative version.

What does each state's exemption actually cover?

The headline status above is necessary but not sufficient. The conditions inside each exemption determine the dollar exposure for a specific practice.

Queensland

The cleanest position in the country. The Queensland Revenue Office implemented an administrative exemption from 1 December 2024, and the Revenue Legislation Amendment Act 2024, assented on 21 February 2025, embedded the exemption in section 14 of the Payroll Tax Act 1971 (Qld). It covers wages paid by a "medical practice" to a "general practitioner", whether the GP is engaged as an employee or as a contractor. A medical practice is defined as an entity carrying on a business at which services ordinarily provided by a medical practitioner registered in general practice are provided, other than a hospital. The exemption does not extend to medical specialists or allied health practitioners; their wages remain potentially taxable under the standard contractor rules.

The structural condition QRO emphasises is that payments must flow through the medical practice in the ordinary way. Arrangements that route patient fees directly from the patient to the practitioner's bank account, bypassing the practice ledger, fall outside the exemption. Practices changing their banking arrangements to chase the exemption should take advice; the QRO public ruling on relevant contracts in medical centres (PTAQ000.6.5) is the authoritative source on what counts.

Victoria

Victoria's exemption is the most operationally complex in the country. From 1 July 2025, the State Revenue Office provides an exemption for wages paid or payable by a GP medical business to employee and contractor GPs in proportion to the work performed in relation to fully-funded items. "Fully-funded" is defined as Medicare benefits paid or payable to the patient or the practitioner, Medicare incentive payments, and the reasonable cost of any consumable used to administer a vaccine. Privately billed work is excluded; mixed-billing practices apply the exemption pro-rata.

The formula matters. A practice that bulk-bills 60% of its GP income gets the exemption on 60% of its GP wages; the other 40% remains taxable. The proportion is calculated and recorded annually, with supporting evidence. Historical exposure for the periods ending 30 June 2024 and 30 June 2025 was addressed via the Treasurer's ex gratia powers, but only on application; practices that did not apply and self-assessed retain their exposure. The Victorian payroll tax-free threshold is also the lowest in the country at $1 million (from 1 July 2025), which means small practices that escape exposure in other states may still be inside the Victorian regime.

New South Wales

NSW has not granted an exemption. It has granted a rebate under the Bulk Billing Support Initiative, which Revenue NSW administers on top of the standard payroll tax regime. An employer is entitled to a rebate of payroll tax paid or payable for "relevant general practitioner wages" from 4 September 2024, but only if the practice meets a bulk-billing threshold: the "relevant proportion" must be at least 80% in metropolitan Sydney and at least 70% in regional and rural areas. Past unpaid payroll tax for relevant GP wages, accrued before the rebate started, is separately exempted under the Revenue Legislation Amendment Act 2024.

The rebate is structurally weaker than an exemption. The practice has to pay the payroll tax and then claim the rebate; cashflow is affected; and the bulk-billing threshold is a cliff, not a slope. A practice that runs at 79% bulk-billing in metro Sydney pays the full payroll tax on its relevant GP wages with no rebate. NSW also published Commissioner's Practice Note CPN 036v2, which sets out the detail on contractor exemptions including the 90-day-per-year rule for short contracts. Practices with intermittent locum arrangements should read CPN 036v2 carefully.

Australian Capital Territory

The ACT moved from a temporary amnesty (which required a 65% bulk-billing threshold and applied to 30 June 2025) to a permanent exemption from 1 July 2025. The ACT Revenue Office describes "designated medical practices" as exempt from payroll tax on wages paid or payable to a GP, employee or contractor, for medical services that are bulk-billed or delivered under Part V of the Veterans' Entitlements Act 1986 (Cwlth) or under the Workers Compensation Act 1951 (ACT). Crucially, the 65% bulk-billing minimum was removed in the permanent version; the exemption now applies service-by-service, regardless of the practice's overall bulk-billing percentage.

The ACT design is generous in one direction (no overall threshold) and narrow in another (only bulk-billed, DVA Part V, or workers comp services are exempt; everything else is taxable). It is closer to the SA design than to the Queensland design.

South Australia

South Australia ran a payroll tax amnesty from 1 July 2018 to 30 June 2024 for medical practices with contracted GPs. To benefit, a practice had to register for the amnesty by 30 November 2023 and register for payroll tax by 30 June 2024. Practices that did so are not required to pay payroll tax on contracted GP payments during the amnesty period. From 1 July 2024, RevenueSA operates a bulk-billed exemption: wages paid or payable to employee and contractor GPs for bulk-billed services are exempt; privately billed work is not.

The risk in SA is concentrated in practices that did not register during the amnesty window. They have full retrospective exposure for the 1 July 2018 to 30 June 2024 period (subject to the standard five-year reassessment limit and any extensions). RevenueSA has signalled it will pursue these cases.

Western Australia

WA stands apart. The Pay-roll Tax Assessment Act 2002 (WA) does not include the "relevant contracts" provisions that the harmonised legislation in the eastern states relies on. WA assesses contractor arrangements on the common-law totality of the relationship, similar to the test the High Court applied in Construction, Forestry, Maritime, Mining and Energy Union v Personnel Contracting (2022) and Jamsek v ZG Operations (2022). The result is that WA medical practices can usually preserve a genuine contractor relationship for payroll tax purposes if their service agreements and operational reality support it, even without a bulk-billing-tied exemption.

The WA payroll tax-free threshold is $1 million, and the WA Government has publicly stated it does not intend to change the contractor provisions. WA practices should still maintain service agreements that accurately reflect the contractor relationship: the absence of "relevant contracts" deeming does not protect against a finding that the GPs are common-law employees.

Tasmania

Both major Tasmanian parties committed at the most recent state election that payroll tax would not apply to contracted GPs. Neither commitment has been legislated. The current position is that standard harmonised payroll tax law applies, including the "relevant contracts" provisions, and Tasmanian practices above the $1.25 million threshold are exposed in the same way NSW practices were exposed before the rebate. The State Revenue Office of Tasmania has not yet issued a public ruling specific to medical centres, which leaves the sector in an unresolved holding pattern through 2026.

Northern Territory

The NT raised its payroll tax-free threshold to $2.5 million from 1 July 2025, the highest in Australia. There is no medical-specific guidance or exemption. In practice this means the threshold filter does most of the work: a sole-doctor or small-group NT practice with total wages under $2.5 million has no payroll tax exposure at all, regardless of contractor classification. Larger NT practices should default to the harmonised "relevant contracts" analysis.

Why "bulk-billed only" matters more than it sounds

Four of the seven jurisdictions that offer any relief (NSW, VIC, ACT, SA) tie that relief to bulk-billed services. The structure has three operational consequences practices need to plan for.

First, the exemption value moves with billing mix. A practice that bulk-bills 70% of GP work in Victoria gets a 70% exemption on GP wages; if the mix moves to 50% bulk-billed next year, the exemption value falls. Practices should model their payroll tax bill against several billing-mix scenarios, not against a single point estimate.

Second, the Bulk Billing Practice Incentive Program and the bulk-billing threshold for payroll tax are different rules with different definitions. A practice can satisfy BBPIP eligibility (which has its own bulk-billing requirements tied to concession card holders and children under 16) without satisfying a state payroll tax threshold (which generally counts all bulk-billed services). Confusing the two leads to overclaim on one side and underclaim on the other.

Third, the MyMedicare registration model and Medicare reform sequence (including the Assignment of Benefit modernisation from 1 July 2026) directly affect bulk-billing operations. Practices considering changes to their consent workflow, billing mix, or appointment types should run those changes past the payroll tax model before implementing them. A workflow change that pushes bulk-billing from 81% to 79% in metro Sydney can flip the NSW rebate from full to zero.

How does payroll tax interact with the ATO contractor classification?

These are two separate regimes with two separate tests, and a practice can pass one and fail the other. The ATO classification under section 12 of the Superannuation Guarantee (Administration) Act 1992 and the recent High Court cases (covered in our employee-vs-contractor guide) asks whether the GP is a common-law employee for income tax withholding, superannuation guarantee, and Fair Work purposes. State payroll tax under the "relevant contracts" provisions asks whether the contract between the practice and the GP is a "relevant contract" for payroll tax purposes, which is a different and generally broader test.

A GP can be a genuine common-law contractor (so no SG, no PAYG withholding, no Fair Work coverage) but still produce "relevant contract" wages for state payroll tax (so the practice owes payroll tax on the contractor payments, subject to the state-specific exemption or rebate). The two analyses must be run separately. Practices that previously assumed a strong contractor classification protected them from payroll tax learned that lesson the hard way in 2022 to 2024. The post-amnesty regime in 2026 leaves practices in NSW, SA, VIC and ACT in particular exposed if either test goes against them.

What practices must do before 30 June 2026

Treat 30 June 2026 as the operational review date, ahead of the FY27 financial year. The checklist below is the minimum every practice owner and practice manager should complete.

1. Confirm which state regime applies (it is the state where the work is performed, not the state where the practice entity is registered), and for multi-state groups, run the analysis per state.
2. Pull your last 12 months of GP billings broken down by Medicare bulk-billed, Medicare privately billed, DVA, workers comp, and patient-funded categories. Calculate the bulk-billed proportion and any state-specific "fully-funded" proportion.
3. Compare that proportion against the relevant state threshold (NSW 80% metro / 70% regional, VIC formula-based, ACT no minimum but only bulk-billed services qualify, SA bulk-billed only).
4. If in QLD, confirm payments to GPs flow through the medical practice in the ordinary way (not direct-to-doctor banking arrangements that bypass the practice ledger).
5. If in NSW, model the cashflow impact of paying payroll tax and then claiming the rebate, and put aside the working capital required.
6. If in SA and the practice did not register during the amnesty window, take legal and tax advice now on the retrospective exposure for the 1 July 2018 to 30 June 2024 period.
7. If in VIC, document the fully-funded proportion calculation with supporting evidence ready for an SRO audit, and confirm the practice still benefits net of the $1 million threshold.
8. If in ACT, audit which services are billed as bulk-billed, DVA Part V, or workers comp, because everything else generates a taxable wage.
9. If in WA, review GP service agreements against the common-law totality-of-relationship test and ensure operational reality matches the agreement.
10. If in TAS, monitor for any legislative announcement; default to assuming the harmonised regime applies until a Tasmanian medical-specific exemption is gazetted.
11. Re-confirm your contractor vs employee classification under ATO rules separately; the two regimes do not align automatically.
12. Set a Q3 FY27 calendar reminder (October to December 2026) to recheck billing-mix proportions and confirm no state has shifted its threshold or exemption design at the FY27 budget.

If the practice operates across multiple states, or sits close to a state's threshold or bulk-billing cliff, professional advice from a tax practitioner with medical-sector specialisation is worth the cost. The numbers involved (potentially six figures of payroll tax annually) justify it.

Frequently Asked Questions

Do medical practices still pay payroll tax on contractor GPs in 2026?

In most states, yes, but with varying degrees of relief. Queensland has a clean permanent exemption from 1 December 2024 (made permanent on 21 February 2025) that covers all GP wages paid by a medical practice, whether to employees or contractors. Victoria, the ACT and South Australia provide bulk-billed-only exemptions from 1 July 2025, 1 July 2025 and 1 July 2024 respectively. NSW provides a rebate (not an exemption) from 4 September 2024, conditional on bulk-billing thresholds. WA uses a different framework. Tasmania has no enacted exemption.

Which states have a permanent exemption for GP payroll tax?

Only Queensland offers a true permanent exemption that is not conditional on bulk-billing percentage. The exemption was implemented administratively on 1 December 2024 and embedded in section 14 of the Payroll Tax Act 1971 (Qld) when the Revenue Legislation Amendment Bill 2024 passed on 21 February 2025. The exemption applies to all GP wages paid by a medical practice (defined to exclude hospitals) to either employee or contractor GPs. It does not extend to medical specialists or allied health practitioners.

Does the Victorian payroll tax exemption apply to privately billed services?

No. The Victorian exemption from 1 July 2025 applies only in proportion to "fully-funded" work, which the State Revenue Office defines as Medicare benefits, Medicare incentive payments, and reasonable vaccine consumable costs. Privately billed GP work is excluded. A practice that bills 50% privately pays payroll tax on 50% of its GP wages (subject to the $1 million threshold). The proportion is calculated and recorded annually with supporting evidence.

Has the GP payroll tax amnesty ended in my state?

Yes, in every state that ran one. South Australia's amnesty closed on 30 June 2024 (with registration required by 30 November 2023). The ACT amnesty closed on 30 June 2025. The NSW 12-month audit pause ended on 3 September 2024, replaced by the Bulk Billing Support Initiative rebate. Queensland's administrative arrangement transitioned into a permanent legislative exemption on 21 February 2025. Victoria's ex gratia relief covered exposure to 30 June 2025. Practices that did not act during the relevant amnesty window now face full retrospective exposure for the amnesty period.

Is GP payroll tax the same as the ATO contractor classification question?

No. They are two separate legal regimes with two separate tests. The ATO contractor classification (relevant for super guarantee, PAYG withholding and Fair Work) asks whether the GP is a common-law employee. State payroll tax under the "relevant contracts" provisions asks whether the contract is a "relevant contract" for payroll tax purposes, which is generally a broader test. A GP can be a genuine common-law contractor for ATO purposes and still produce "relevant contract" wages for state payroll tax. The two analyses must be run separately; see our employee vs contractor guide for the ATO test.

Are specialist and allied health practices exempt under any of these regimes?

Almost never. Every state exemption written so far targets general practice specifically. Queensland's section 14 exemption is for "general practitioners". Victoria's exemption applies to "GP medical businesses". The ACT exemption covers "designated medical practices with General Practitioners". SA and NSW relief is similarly GP-focused. Medical specialists and allied health practices remain subject to the standard "relevant contracts" provisions in every state that has them, and their contractor arrangements need to be reviewed against the Thomas and Naaz line of authority on the same basis pre-2024 GP practices were.

What happens if my NSW practice falls below the 80% bulk-billing threshold?

The NSW Bulk Billing Support Initiative rebate is cliff-edged, not graduated. A metro Sydney practice that bulk-bills 79% of the "relevant proportion" gets no rebate at all on its relevant contractor GP wages; the practice pays the full payroll tax. A practice running close to the 80% (metro) or 70% (regional) threshold should model the value of the rebate against any commercial decision that might tip billing mix below the line. The rebate is also a rebate (paid on claim), not an exemption, so the cashflow position is "pay tax now, claim later" rather than "do not pay".

What if my practice operates across multiple states?

Run the analysis per state and per location. The applicable regime is the state where the GP performs the work, not the state where the practice entity is registered or incorporated. A multi-state group will sit inside different exemption structures in different states simultaneously: a Queensland clinic in the group has the clean exemption; a Victorian clinic has the formula-based partial exemption; a NSW clinic has the conditional rebate. Group reporting, intra-group payment flows, and grouping provisions all add complexity; multi-state groups should take specialist advice rather than reading off a state-by-state summary.