Australian GPs Income Explained

GPs working in Australian General Practices are not paid on a salary basis as employees. They work as contractors, relying on billings generated through the fee-for-service model.

As an experienced Specialist GP, you will realise that this system encourages you to provide a high standard of care, develop excellent relationships with your patients, and work smarter, not harder. This will give you an excellent income and a healthy work-life balance.

 

Total Billing

We start by looking at the total billing and then calculate the GP’s Income.

• Billing is the total amount of income generated for your consulting activity. This income is not all paid to the GP.
• Your billing is made up of the building blocks of payment for each consultation (consult).
• These are paid by Medicare, usually with additional payments made by the patient.
• Medicare is Australia’s universal health insurance scheme.
• A standard face-to-face consult that lasts 6 – 20 minutes, is listed as Item 23.
• The Medicare payment for Item 23 is $41.40.  Typically, patients pay an additional fee to cover the gap, bringing your total income for this consult up to $80.

GPs on the RACPG PEP Specialist Pathway are paid the full Medicare rebate. This means that they are paid the same for each consult as any GP who has qualified in Australia.

 

Calculating Total Billings

• If you see four patients each hour for 38 hours of your week, then your billings can come up to around $10,000 for a week of work.
• If you work 46 weeks a year, then $10,000 / week will become an annual billing of $460,000.

 

GP Earnings are calculated as a percentage of Total Billings

GP Earnings come from the percentage of billings; this is listed in the Services Agreement that you have with the practice. The practice will use their percentage of income to cover their operating and business costs including rent, nursing and support staff wages, supplies, advertising, utilities, and all the other costs that you can imagine in a modern medical centre.

• Typical splits between GP and the practice are:
  • 60% to the GP – 40% to the Practice
  • 65% to the GP – 35% to the Practice
  • 70% to the GP – 30% to the Practice

In the case of a non-VR GP -someone who requires supervision- this may start 5% lower, rising to the practice’s normal percentage when the GP becomes a fellowed GP. This is because of the additional support received by the GP during that time.

 

Calculating Your Total GP Income Before Tax

If your total Billings for a year is $460,000 and your split is 70%, then your total GP income before tax, will be $322,000.

 

Calculating Tax and Income after Tax

The Government has an up-to-date Tax Calculator

• Tips: Select the most recent year and assume that you are a resident for a full year.
• Remember – it will show the tax that you pay and you need to deduct this from your total income above.

In this case: the GP with a total GP income of $322,000 will have an after-tax income of $206,000.

 

Will this Provide a Good life for my family?

Reports on earnings across the country by the Australian Bureau of Statistics show that median weekly earnings are around $1,300. This would be an annual income of $67,600 before tax.

A GP seeing 4 patients an hour, earning $322,000 before tax, will earn around three times the average person’s income. This will provide you and your family with a very comfortable lifestyle, including the opportunity to save money and build an excellent future.

When using Cost of Living calculators, we recommend that you compare the cost of living in your new home, with that website’s listings of costs in your current location, so that you know you are comparing like with like.

 

Other Components

• Minimum hourly rate:

Commonly, the practice will pay a fixed minimum amount per hour for your first three months. This will enable you to settle into your new working environment. This may be written as something like, $150 per hour, or 65% of billings, whichever is higher. This is positive and shows that the practice expects that in your initial months, you will have enough patients and be a competent and successful GP, to be able to cover that amount.

• Minimum annual income:

Some practices are happy to pay a minimum of $150,000 for the first year, which can provide an excellent level of stability when moving country with your family. This same practice will also pay you a higher amount for 65%, or 70% of billings when you are earning it so that you are rewarded for your hard work.

• Relocation Payment / Sign-on Bonus

Some corporates and some independent practices offer a one-off payment when you first start. This is to help with the costs that a GP is accruing to be able to move and start work. Usually, this is paid shortly after you start work. Some practices offer to spread the amount over three payments, starting from an initial payment when you first sign your contract and then when you arrive.

The business model of smaller and independent practices can make it harder for them to pay these payments, but many GPs will have an excellent experience moving and working with practices even though they are not able to offer these payments.

• Car and accommodation payments

These have previously been part of GP’s packages, usually in smaller, more remote towns. However, while car and accommodation payments may occasionally be available, due to a significant increase in the number of GPs applying for jobs in all locations, we don’t expect these perks currently.

• Rural Incentives

Based on the MM location and factors such as the distance to larger capital cities, there are some excellent large towns and regional cities that will offer great incentives on top of your other income.

• Moratorium Reduction

Working in some locations can reduce your 10-year DPA moratorium down to as low as 4 years.

 

Ways to Increase Income

Compared to having a fixed salary, this fee-for-service model provides you with an opportunity to increase your own income.

• With the increase in the number of GPs moving to Australia, there are practices in MM2 locations, those closest to the largest cities, have many GPs in the town. As a result, some of these GPs are not fully booked every day.
• You will ensure that you will be fully booked if you work in a location that has a statistically proven GP shortage.
• Some GPs alter their hours to be earlier, later, or on the weekend if there is patient demand in their community.
• GPs and practices always report back to us that the best way to be financially successful in this model is to provide excellent care to your patient base.
• In your orientation, you will be shown how to use the Medicare Benefits Scheme (MBS) correctly.
• Typically, when providing a more complex consult, the billing is higher. Remember that the RACGP provides support for you in nurturing your knowledge of special interests, currently supporting 33 different specialty groups.
• Bulk Billing Incentive Payments are higher in rural areas.

 

Financial Responsibilities to Consider

You will need to set aside some of your income because you’re not a salaried employee and will be required to make tax payments. There is a standard part of doing business in Australia. There is support available to help you through the process.

You will need Medical Indemnity Insurance. The amount differs for each individual, typically it is a monthly payment and we recommend contacting a specialist to guide you in this area.

You will need to put some income aside to cover your leave from the practice. Typically, GPs take 4 – 6 weeks leave a year.

Remember that on your 482 Temporary Visa, you will need to pay for Health Insurance, until you become a Permanent Resident. There is a helpful government site for you to compare health insurance policies.

You will encounter costs for your registration.

 

Doctor Connect would welcome the opportunity to work with you to find the best opportunity for yourself and your family.

Note: We are a recruitment agency and this is general information. Some GPs will earn much more and others will earn less than these amounts. We cannot guarantee you these incomes but we can help you find the right opportunity to flourish and be successful.