The reason why a practice may be seeking to deduct practice costs or exclude certain item numbers for the purposes of percentage calculation (particularly when the practice nurse is doing the primary work) may be because this is consistent with their arrangements for their contractor GPs. However, this approach is not compliant with the NTCER, and should not be applied for GP registrar percentage calculations.
GP registrars are engaged by training practices as an employee. This is consistent with advice from the Australian Tax Office and the NTCER (clause 4) “gives rise to no other relationship between the [registrar and practice], such as independent contractor, partner or agent”.
The NTCER defines gross billings to: “include all fees generated by the registrar at the practice in which they are employed” (NTCER clause 1), and the registrar’s “percentage” is calculated from “gross billings or receipts” (NTCER Schedule A). Therefore, all item numbers billed to the GP registrar should be included in their percentage billings calculation.
As employees, and according to the NTCER minimum, GP registrars receive a lower percentage (49.05% including superannuation) of the billings earned compared with contractor GPs (typically 65-70% or more). As such, the share of the registrar’s billings retained by the practice should contribute to the practice costs, including the practice nurse salary.
Finally, prima facie, this approach may also breach Section 324 of Fair Work Act in terms of criteria for permitted deductions from an employee’s remuneration (including employee’s wage/salary, incentive-based payments, bonuses, allowances).