What is medical & allied health?
Remittance reconciliation, contractor-doctor exposure watched, and practice structures kept separate in the books.
A medical or allied health practice in Australia runs its revenue through a remittance pipeline built around Medicare rather than private insurers. Bulk-billed services are billed directly to Medicare with the benefit assigned to the practice and no gap charged to the patient; privately billed services charge the practice’s own fee, with the patient claiming the Medicare Benefits Schedule (MBS) rebate and the practice collecting the gap between the MBS fee and its own charge — sometimes narrowed by a private health fund’s gap cover scheme. Department of Veterans' Affairs (DVA) patients run on a third billing track again. A practice that doesn’t reconcile Medicare and health-fund remittances at the line-item level loses the ability to tell a scheduled rebate from an unpaid gap sitting with the patient.
How the practice is structured shapes everything downstream. Many practices run a service entity — typically a trust — that owns the premises, equipment, and non-clinical staff and charges the practising clinicians a service fee, while the clinical income itself sits with the individual practitioners or their own entities. That split exists for legitimate commercial reasons — asset protection, succession planning, centralised administration — but the ATO scrutinises it closely under Taxation Ruling TR 2006/2, which targets service fees that are disproportionate to the services provided or structured to guarantee the service entity a profit regardless of commercial reality — and the ATO’s finalised Practical Compliance Guideline PCG 2025/5 sets out a related but separate compliance approach for income-splitting and profit-retention risk in personal-services arrangements generally. The structure and its pricing are the practice’s accountant’s call to set and document — we track the numbers that documentation runs on.
Who does what
| Your CapEasy team | Medical & allied health, the reconciliations and reporting behind it, and the questions list that keeps it honest. |
| Your registered BAS or tax agent | Everything that carries a licence in Australia — rendered exactly as written: work out what goes on your bas, or advise you on it — under tasa 2009 that requires registration we do not hold. |
| You | One conversation with one named person, and the decisions that are genuinely yours. |
Medical & allied health in Australia
Payroll tax on contractor GP payments — the relevant contract provisions
Revenue NSW, the Queensland Revenue Office (Public Ruling PTAQ000.6.5), and the Victorian State Revenue Office (Revenue Ruling PTA-041) have each confirmed that payments a medical centre makes to contractor doctors can fall within the payroll tax law’s relevant contract provisions, meaning payroll tax can apply even without an employment relationship. Whether a given practice’s arrangements are captured, and what any state-specific exemption or bulk-billing relief means for it, is the practice’s own accountant or registered tax agent’s assessment — we track contractor doctor payment data by state and by billing type (bulk-billed versus private) so that assessment runs from segmented figures rather than a reconstruction of a year’s payment history.
Bulk-billing-linked payroll tax exemptions and reliefs vary by state and change over time
Victoria exempts GP wages tied to fully-funded (bulk-billed) work from 1 July 2025; other states have run time-limited amnesties, rebate schemes, or audit pauses tied to bulk-billing rates rather than a uniform national approach. These reliefs are jurisdiction-specific and have shifted materially since first introduced — the practice’s accountant or registered agent determines current eligibility for the state the practice operates in. We track the bulk-billed and privately-billed proportion of contractor GP work so that eligibility assessment has real data to work from.
Service entity and service trust arrangements — ATO scrutiny under TR 2006/2
Where a practice runs a service trust charging clinicians a fee for premises, staff, and administration, the ATO’s Taxation Ruling TR 2006/2 identifies fees disproportionate to services provided, or arrangements guaranteeing the service entity a profit regardless of commercial reality, as the primary risk factors. Where a practitioner’s own income is routed through a personal services entity, the ATO’s finalised Practical Compliance Guideline PCG 2025/5 sets out a separate compliance approach targeting income-splitting and indefinite profit retention. Setting the fee or entity structure, documenting its commercial basis, and assessing risk against either framework is the practice’s accountant’s role. We track service fees, hours, and underlying cost data so that documentation is built on real, contemporaneous numbers.
GST treatment of medical and health services
Most Medicare-eligible medical services are GST-free under Subdivision 38-B of the GST Act, while services outside the Medicare Benefits Schedule — cosmetic procedures being the most common example — can be taxable supplies requiring GST to be charged and remitted. Classifying a specific service is the practice’s registered BAS or tax agent’s call under TASA 2009; we keep GST-free and taxable revenue tracked as separate line items so the BAS is prepared from correctly segmented data rather than a blended figure.
What your registered BAS or tax agent receives from us
- Medicare and private health fund remittance data reconciled at the line-item level — scheduled fee, benefit paid, and patient gap tracked separately per service
- Bulk-billed and privately-billed revenue tracked as distinct categories, by provider and by state, feeding both GST classification and payroll tax exemption assessment
- DVA remittance data reconciled separately from Medicare and private health fund income
- Contractor doctor payment data tracked by state, so payroll tax relevant-contract exposure can be assessed on real, segmented figures
- GST-free and taxable service revenue tracked as separate line items, ready for the registered BAS agent to lodge from
- Service entity or service trust fee data — hours, costs, and the fee charged — compiled to support the accountant’s TR 2006/2 and PCG 2025/5 documentation
