There has been plenty of focus on medical and dental clinics in relation to Payroll Tax across most states over the last few years.
Since December 2022, Queensland Revenue Office (QRO) have produced multiple versions of a Public Ruling specifically in relation to relevant contracts and medical centres including dental clinics, general practices, physiotherapy practices, radiology centres, specialist practices and similar healthcare providers.
The Good News
Earlier this month, the QRO announced an amnesty for dental clinics paying ‘contracted dentists,’ effective until 30 June 2025. The QRO have outlined “Dental clinics that register for the amnesty are not required to pay payroll tax on payments to contracted dentists up to 30 June 2025 and for the previous 5 years (i.e. 2018-25).”
Whilst this is good news for Dental clinics; it requires clinics to consider their circumstances and adhere to the administrative arrangements. Information that needs to be disclosed under the amnesty eligibility requirements spans 5 financial years.
Before registering for the amnesty, dental clinics should carefully review their contracts, payment structures, and potential payroll tax exposure to ensure all information is accurate.
A link to the amnesty for contracted dentists is shared here.
The Bad News
The amnesty indicates that QRO are focused on scrutinising dental clinics more closely.
The QRO ruling outlines each contract must be considered individually and on a case-by-case basis to determine whether it is a relevant contract.
The amnesty provides relief for historic exposure however continues to provide uncertainty for the future.
What Is Happening Elsewhere?
In a landmark victory that could reshape how businesses navigate payroll taxes, Uber Australia recently emerged victorious in a high stakes battle with the NSW Supreme Court. This win could ripple through industries far beyond ridesharing—especially in sectors like healthcare, where complex payment structures are common.
At the heart of this case was a dispute over $81.5 million in payroll tax assessments. Uber successfully argued that the payments it makes to its drivers should not be considered wages under the NSW Payroll Tax Act. The Court agreed, deciding that Uber's role as a “payment collection agent” meant that the money it passes on to drivers isn't classified as a wage.
The Court’s ruling was based on the interpretation of the “relevant contract” provisions of the Payroll Tax Act, particularly sections 32 and 35. Chief Justice Hammerschlag acknowledged that a “relevant contract” existed between Uber and its drivers, but since Uber acts as an intermediary collecting payments from riders and passing them on to drivers, the payments were not deemed wages for the purpose of payroll tax.
The Uber decision could have far reaching implications, especially in industries with similar tri-party payment structures, such as the medical industry. For example, dental clinics where a service entity collects patient fees and remits them to dentists (after deducting service charges) might see similar outcomes. We note this is listed for the Court of Appeal late October.
Where to From Here?
- Review your agreements with contracted dentists and flow of funds from patients.
- Understand your clinic exposure and risk if your payroll tax liability were assessed. For example, a dental clinic that provides services to a couple of dentists may fall below the threshold.
- Consider your circumstances and increased costs of running your clinic.
- Clearly understand and document Dentists in your clinic that work elsewhere and whether they may fit the relevant contracts exemption - we understand this will apply in many instances.
- Seek professional advice now, don’t leave this until June 2025.
With the Queensland Amnesty offering relief, now is the perfect time to address payroll tax concerns with confidence. Gain clarity and peace of mind by working with a specialist who can help you navigate the process smoothly and efficiently. To get in touch complete our Contact Us form or call us on 1800 988 522.
Nicole is passionate about working with clients to assist in wealth creation and wealth accumulation strategies. Nicole takes the time to understand their goals and motivations to provide them with tailored advice. Working closely with clients to better understand their needs, she draws on years of experience to help clients achieve their goals.
