Medical Practice Payroll Tax — Australian Capital Territory

What this means for your practice

The proportional method scales with your bulk-billing share. The ACT threshold dropped to $1,750,000 from 1 July 2026 (Determination DI2026-151), and the rate is now banded by Australia-wide group wages (6.75% to 8.75%). Non-GP practitioners are not covered by any exemption. Because the rate is selected by Australia-wide group wages rather than ACT wages, a practice that is small in the ACT but part of a larger national group pays the higher band rate on its ACT wages — model the group position, not the ACT entity in isolation. Universities with an ACT campus are capped at 6.85% regardless of group wages.

Payroll tax threshold context

Australian Capital Territory threshold: $1,750,000 (FY 2026/2027). Deemed wages plus employed staff wages are tested against this threshold.

How an ACT practice generates deemed wages

An ACT practice that invoices in its own name and forwards the balance generates deemed wages equal to the forwarded amount. The GP share is then reduced by the proportional exemption, while every other practitioner's share stays in the base.

The amount is struck practitioner by practitioner, and the exemption is applied to the GP share before the threshold is tested.

Measuring the ACT exempt share

The exemption follows the bulk-billed share of GP service income, in the same shape as Victoria and South Australia. An earlier amnesty to 30 June 2025 demanded at least 65% bulk billing, but the exemption itself is proportional and carries no percentage test.

Because the mix shifts through the year, the exempt share should be recalculated each period rather than fixed at the start.

Why the ACT band dominates the exemption

The ACT rate comes from five bands selected by Australia-wide group wages. A practice stepping from 6.75% to 7.35% because its group passed $50,000,000 feels that change across all its ACT wages — an effect larger than most movements in bulk-billing proportion, and one the practice cannot influence through its own billing.

For an ACT practice inside a large group, the band and the apportioned threshold are the main variables; the exemption is usually the smaller lever.

Who the ACT exemption leaves out

The exemption reaches bulk-billed GP services only. Specialists, dentists, physiotherapists, psychologists and allied health practitioners are outside it, so a mixed practice must keep the GP cohort separable.

The non-GP cohort is taxed at a band rate chosen by the group's national wages, over which the practice has no control.

What an ACT practice should document

The Service Facility Agreements, the working behind the bulk-billed proportion of GP income, and the group's national wage totals should all be on file — the last because the band and the apportioned threshold both follow the group's Australian-wide wages.

A practice operating in the ACT and elsewhere should model the band and the apportionment side by side, since both move with the group total.

Where ACT exposure concentrates

Risk concentrates in practices inside a large national group. A small ACT operation within a group above $150,000,000 of national wages loses the threshold altogether and pays 8.75% from the first dollar, whatever its own bulk-billing position.

For a small ACT practice, then, the group's size matters more than its own billing.

How an ACT practice builds the exempt GP figure

The ACT exemption is proportional to bulk-billed GP services, so the practice needs the bulk-billed share of GP work and the total of GP wages. Applying the first to the second produces the exempt amount. As in Victoria and South Australia, the ratio runs on wages rather than on total billings, and it should be rebuilt as the mix moves through the year.

The exempt amount comes out before the threshold is tested, but in the ACT the threshold is usually the smaller of the two variables. The band rate, selected by the group's national wages, applies to the whole of the ACT wage base, so a practice's own billing decision is rarely what drives its ACT liability.

The ACT practice whose group size, not billing, sets the rate

Because the ACT band is selected by Australian-wide group wages, a practice's rate can change without any movement in its own ACT payroll — a group crossing a band boundary lifts the rate on wages the practice has always paid. The same group total also shrinks the apportioned threshold, so both effects land at once.

For a practice in that position the exemption is a secondary lever. Improving the bulk-billing rate reduces the exempt amount, but the band and the apportioned threshold move with the group, so the practice should model the group total alongside its own billing rather than treating the exemption as the main variable.

What an ACT practice should establish about its group

The ACT rewards a practice that understands its group position more than almost any other jurisdiction. The band, the apportioned threshold and the loss of the threshold above $150,000,000 of national wages are all functions of the group total, so the practice should establish that total before it estimates its rate or its shelter.

For a small ACT operation inside a large national group, the practical conclusion is often that the group's size governs the outcome and the practice's own bulk-billing data matters less. Modelling the band and the apportionment together, rather than the exemption alone, is what produces a figure that reflects the ACT's structure.

A worked ACT medical scenario

Take an ACT practice with $1,500,000 of employed staff wages and $2,400,000 of GP payments, with 75% of GP service income bulk billed. The exemption removes $1,800,000 of GP wages, leaving $600,000 taxable. Added to the staff wages, the taxable total is $2,100,000. The $1,750,000 threshold leaves $350,000 taxed at 6.75% — $23,625 — assuming the group's national wages keep it in the bottom band.

Move the same practice into a group with $60,000,000 of national wages and the rate rises to 7.35% while the apportioned threshold shrinks, so the liability grows on both counts at once. In the ACT the group's size, not the practice's billing, usually drives the result.

A third version makes the point sharper. Keep the practice's own ACT wages at $2,100,000 but lift the group's national wages past $150,000,000, and the top band removes the threshold altogether: the whole $2,100,000 is taxed at 8.75% — $183,750 — against $23,625 in the bottom band. No change to the practice's billing produced that difference; only the group's size did.