GP Contractor vs Employee: Payroll and Tax Implications

Why This Classification Matters More Than It Used To

Medical practice arrangements involving GPs working under service agreements have been specifically targeted by state revenue offices in recent years, with payroll tax assessments applied retrospectively to clinics that assumed their doctors were straightforward contractors.

What Determines the Classification

Most GPs working under a service agreement bill the clinic or patients directly and manage their own tax and superannuation, pointing toward genuine contractor status. But the label doesn't settle the question, control over hours, exclusivity, and how billing flows through the practice all factor into the actual classification.

Superannuation Can Still Apply to Contractors

Superannuation guarantee obligations can extend to contractors paid principally for their labour, regardless of how the relationship is labelled. This is a commonly underestimated obligation.

What a Clinic Should Actually Do

• Document the real arrangement, how billing actually flows and the degree of independence in practice.
• Get specific advice, given the payroll tax exposure for medical practices.
• Review existing arrangements, don't assume historical classifications are still correct.

Why a Bookkeeper's Involvement Matters Here

A bookkeeper who understands medical practice structures can flag where bookkeeping evidence doesn't match the stated classification, often before it becomes a problem during a review.