Practices
Service fees
A service fee is the charge for rooms, staff and admin. It is not the same thing as the patient’s medical fee. This page does not set the percentage.
What it pays for
Rooms, reception, billing and shared admin are the usual contents of a service fee. Patient income produced by the doctor’s own effort is a different question, and the personal-services-income rules are on their own page.
A percentage of billings
Some agreements describe the fee as a percentage of the doctor’s billings. In Thomas and Naaz Pty Ltd v Chief Commissioner of State Revenue [2023] NSWCA 40, the Court of Appeal record describes agreements under which practitioners paid 30% of billings. That 30% is the facts of that case. It is not a standard fee, and this site does not suggest one.
Why the wording matters
Payroll tax looks at the contract and the payments. The states do not use the same notice. GST looks at what is supplied. Section 38-7 says a supply of a medical service is GST-free. The ATO medical-services page, last updated 12 June 2024, says a supply to another business is not GST-free as a medical service unless a Medicare benefit is payable. A service fee for rooms and admin is that kind of supply, so it is generally a taxable supply, not the GST-free medical service itself.
State pages
- New South Wales — Revenue NSW — payroll tax and medical services ↗
- Victoria — State Revenue Office Victoria — medical industry ↗
- Queensland — Queensland Revenue Office — GP amnesty ↗
- South Australia — RevenueSA — Revenue Ruling PTASA004 ↗
- Western Australia — RevenueWA — contractor payments ↗
- Tasmania — State Revenue Office Tasmania — contractors ↗
- Australian Capital Territory — ACT Revenue — designated medical practices with GPs ↗
- Northern Territory — Territory Revenue Office — payroll tax ↗
Payroll tax, state by state · Break-even illustration · Practice structures
What doctors often miss
A service fee for rooms and admin is not the medical service. Section 38-7 makes a medical service GST-free. The ATO page says a supply to another business is not GST-free as a medical service unless a Medicare benefit is payable, so that fee is generally a taxable supply.
Included / Not included
Included
- GST Act section 38-7 ↗ · Medical services are GST-free
- ATO medical services ↗ · Last updated 12 June 2024
- Thomas and Naaz [2023] NSWCA 40 ↗ · 14 March 2023
Not included
- A service-fee percentage to use
- GST on a particular invoice
- Payroll tax, stamp duty and insurance
Assumptions you can edit are the inputs on this page. This is a model, not a prediction, a tax assessment, or a recommendation.
A rough figure — not advice. Terms
Advertisement — labelled, never inside the number.