Further important updates to payroll tax for GPs and dental clinics in Queensland have been announced.

GP Payroll Tax Exemption

As part of their platform, the newly elected Liberal National Party (LNP) committed to exempting General Practice (GP) medical centres from payroll tax.

However, the details of these pre-election promises have not been revealed. For example, it is not known whether the exemption will apply solely to individual GPs or extend to the practice as a whole. Additionally, it has not been confirmed whether this exemption will include all GPs, or only those contracted GPs that are deemed employees under the Payroll Tax Act 1971 (Qld) (the Act)), however are not employees at common law.

GP practices are encouraged to monitor developments and updates in this area, and seek legal and accounting advice as required.

Hillhouse Legal Partners will continue to provide updates as they become available.

Dentist Payroll Tax Amnesty

The Queensland Revenue Office (QRO) has announced a payroll tax amnesty aimed at contracted dentists up until 30 June 2025.

The amnesty applies to payments made to contracted and registered dentists. Dentists classified as common law employees and contracted dentists who are already captured under an exemption for payroll tax, are excluded from the amnesty. This is an important distinction for dental practices to keep in mind to understand their obligations and potential liabilities.

Eligibility

To qualify for the amnesty, dental clinics must:

1. be a ‘designated dental clinic’;
2. submit a voluntary disclosure;
3. be registered for payroll tax before 30 June 2025; and
4. comply with ongoing payroll tax disclosure obligations post-disclosure, which includes from 1 July 2025.

A ‘designated dental clinic’ is an employer that conducts a medical centre business and one of the following applies:

1. meets the criteria for registration under section 52 of the Act but is not registered for payroll tax in Queensland and makes payments to contracted dentists;
2. is registered for payroll tax in Queensland but is not declaring its payments to contracted dentists for payroll tax;
3. is or was subject to audit activity (that has not been finalised) in relation to its payments to contracted dentists; or
4. has been assessed on payments to contracted dentists as a result of audit activity.

What does this mean for practices?

Whilst this amnesty is good news for businesses that operate a dental practice, it also signals that the QRO will be seriously investigating dental practices moving forward. While we cannot be certain as to the approach that other States may take, the respective revenue offices of other States may also be reviewing the arrangements between dental practices and practitioners with more scrutiny.

Dental clinics should review their current arrangements and assess whether they are eligible for the amnesty before the 30 June 2025 deadline. Dental clinics should also review their Service Agreements and seek legal and accounting advice well in advance of 30 June 2025 to best manage payroll tax risks before the amnesty deadline.

Hillhouse can help practices to prepare new agreements, update their existing agreement, and advise on practical and operational mechanisms that can be implemented to put best practice systems in place in the event your practice is audited.

Please contact Craig Hong, Director, Hillhouse Legal Partners on (07) 3220 1144 or email craig@hillhouse.com.au to discuss the specific needs of your practice further.