Direct patient billing

State revenue offices have applied the "relevant contract" provisions of state payroll tax legislation to medical centres with contractor GPs, dentists, and other practitioners. The Thomas and Naaz (NSW Court of Appeal, [2023] NSWCA 40) and Optical Superstore (Vic) decisions established that where a workplace collects patient fees and pays them through to a contractor (minus a service fee), the workplace can be liable for payroll tax on those payments as if the contractor were an employee.

Several states have since added GP-specific payroll tax relief, structured differently and mostly tied to bulk billing: the Thomas and Naaz explainer sets out each state. Some workplaces have also restructured so that Medicare or the patient pays the practitioner directly, and the practitioner pays the workplace a service fee. That is direct patient billing, and it inverts the usual cashflow: the receipts are yours, and the fee is a cost you pay out.

When you log a shift, Sessional asks how you were paid. Choose Direct patient billing (workplace keeps a service fee). The field is required on every new shift and has no default, so set it each time.

Sessional has no separate service fee field on a shift, and it does not calculate the fee for you. Pick one way to record the money and use it consistently:

• Net basis. Use the Percentage of billings pay basis at the share you keep (100 minus the service fee percentage), then enter the billing revenue once your statement arrives. The shift total is the billing revenue multiplied by that percentage, so it shows what reaches you. The fee itself is not recorded.
• Gross basis. Use Percentage of billings at 100%, so the shift total is your gross receipts, then add the workplace's service fee invoice as an expense (category Other) linked to that shift. The per-shift margin table on the earnings dashboard then shows the gross, the linked expenses, the net and the margin for that shift.

Until you enter the billing revenue, the shift shows as billings pending and adds nothing to your earnings totals. If you are GST-registered and the workplace charges GST on the fee, use the gross basis and record the fee expense as GST-inclusive with a tax invoice held. Do not add the fee as an expense on a net-basis shift, or the margin table counts it twice. The shift rate basis guide explains how each pay basis is calculated.

• What the service fee is, and whether it is quoted ex-GST or GST-inclusive.
• What the fee is calculated on: Medicare rebates only, or private fees, gap payments and bulk billing incentive items as well.
• Whether the workplace issues a tax invoice or monthly statement for the fee. You need it as evidence, and for any GST credit.
• When the fee is collected: deducted from your receipts, or invoiced to you after the period.
• Which state's payroll tax position the fee assumes, and whether the workplace relies on a GP relief scheme.

• Super Guarantee. With Medicare or the patient paying you, there is no payer paying you for your labour, so s12(3) SGAA does not engage. The Super Guarantee tracker labels direct patient billing shifts "Not applicable". Voluntary concessional contributions remain deductible up to the $32,500 cap.
• GST. Medicare clinical services remain GST-free under s38-7. When you are GST-registered and record the workplace's fee as a GST-inclusive expense with a tax invoice held, the BAS view counts its GST at label 1B. The BAS view builds sales from the invoices you raise in Sessional, so Medicare receipts paid to you directly do not appear there: give your tax agent your Medicare or workplace statements.
• PSI. The PSI diagnostic lists your last 12 months of shifts by workplace and income source and runs the 80% check across them. If you answer "unsure" to the unrelated-clients question, two or more direct streams (direct contractor, direct patient billing or event medical) point to a likely pass, provided you can show offers to the public, while income sourced only through agencies points to a likely fail.

The Super Guarantee tracker, PSI diagnostic, BAS view, expenses and earnings dashboard are part of the Plus and Pro plans. Choosing an income source on a shift is available on every plan.