Employment Resources
Common Payroll Mistakes
At GPSA, we despair at seeing practice time and dollars being spent on payroll errors.
We are all about making your life easier!
We love hearing from practice managers and supervisors wanting to do the right thing by both the practice and the registrar. Getting payroll correct is imperative to the employee/employer relationship as much as the sustainability of the practice.
Payroll errors, particularly the ones in a registrar’s favour, have the potential to turn a once positive relationship on its head. This is not to suggest GP registrars want to be overpaid or rort the system; it simply highlights the importance of getting your calculations correct from the outset and clearly setting out entitlements, rights and responsibilities in the employment contract (see our contract templates here).
PRACTICES PAYING A FULL BASE SALARY ALSO PAYING AN ADDITIONAL EDUCATION RELEASE
Under the NTCER, registrars are required to be released from your practice to attend mandatory education sessions run by their training provider.
The registrar is required to be paid at the base rate for this time, or pro-rata in the case of part-time registrars.
The common error that occurs here is that practices pay their registrar their full base salary and then add the base hourly rate for out-of-practice education on top of this.
Educational release is a component of the AGPT registrar’s base salary, not an additional entitlement.
MY REGISTRAR WORKS 32 HOURS BUT IS PAID FULL TIME
32/38 = 0.84 Full-Time Equivalent (FTE)
If your registrar is working less than a 38-hour week, or – more technically -less than an average of 76 hours per fortnight, they are part-time.
Clause 10 of the NTCER clearly explains the definition of full-time versus part-time employment in the context of GP training.
I AM PAYING MY REGISTRAR A HIGHER PERCENTAGE TO MOTIVATE THEM
The practice is free to determine a percentage of billings over the minimum stated in the NTCER, however this is a business decision which in any other industry would be made based on an established benefit to the organisation not for the purpose of motivating employee performance.
When you unpack professional behaviours and expectations it is important to remember that, in the early terms of a GP registrar, it takes time to become efficient and proficient. That said, reasonable billing targets can be set as your registrar gains confidence.
If a registrar is not motivated at 44.79% billings, increasing their billings percentage to the same as a fellowed GP (say 60%) will not make them any more or less efficient/ proficient or motivated. Teaching your registrar how to bill appropriately/effectively is all part of their training – the hidden curriculum if you will.
Remember too: superannuation is payable on top of the negotiated percentage, so the true cost to the business is considerably more than the amount the registrar sees in their pay.
NEGOTIATING THE BILLING PERCENTAGE
Your registrar will attempt to negotiate a higher percentage; some are known to ask for as much as the independent Fellowed GPs working in the practice. Unlike those Fellows, your registrar is an employee, and as such (in stark contrast with independent GPs who bear their own costs) adds to your expenses with payroll tax, workers compensation insurance, annual leave, personal leave and the potential cost to the practice’s reputation.
Negotiation of the percentage you pay must therefore be done with care and in full awareness of risk versus reward.
The reward is often more than the obvious addition of a clinician to ease your patient’s waiting time for an appointment. GPs-in-Training can make wonderful employees and colleagues, renewing the entire practice team’s passion for learning.
But knowing what a sustainable percentage of billings might be for your practice is not just a financial imperative – honestly, from the experience of many GPSA members across the years, this is vital for a successful training outcome…
Nothing is more damaging to the practice-registrar relationship than the strain caused by the well-meaning agreement to financial terms during negotiations that soon prove unsustainable.
I AM PAYING MY REGISTRAR OVER 60% BILLINGS. THEY ARE VERY GOOD BILLERS
While we encourage practices to pay above the minimum terms outlined in the NTCER, at the same time we emphasise the need to ensure this does not put the business under financial strain.
When it comes to offering a percentage of billings as high as 60% for a registrar, you need to be mindful of
- the additional on-costs the business incurs, and
- the cliff this is setting the registrar on, noting that even if they maintain this percentage when they become tenant doctors post-Fellowship – i.e. paying the fairly standard 40% service fee – they will effectively be earning less than they did as a trainee GP.
Without factoring in unreimbursed supervision-related costs, the additional on-costs on 44.79% already take the practice cost to roughly 60%:
- Superannuation (11.5%, increasing to 12% in July 2025)
- Payroll Tax – varies state by state (e.g. VIC = 4.85%)
- Workers Compensation Insurance – varies by state and size of payroll (eg 0.5%)
The NTCER sets out the minimum you need to pay your registrar. This is a base line from which you have the flexibility as a business to offer more, but only if feasible in terms of sustainability.
MY REGISTRAR USED TWO WEEKS' SICK LEAVE DURING THEIR FIRST SIX WEEKS. I PAID THEM THEIR BASE SALARY PER THE NTCER IN ADVANCE BUT NOW THEY HAVE TERMINATED THEIR CONTRACT EARLY
GP registrars are entitled to access leave in advance, but not more than what would be accrued in any six month block. In this scenario, the registrar was entitled to pro rata six months, which translates into 5 days personal (sick) leave and 10 days annual leave.
Leave in excess of these amounts is purely a business decision, but we would recommend additional leave being treated as leave without pay to manage the risk of overpayment should a registrar terminate their contract earlier than expected.
If the employment contract is terminated early, the employer is entitled to deduct overpayments from the registrar’s final payment. Clause 6.2 of the NTCER refers to the Fair Work template you can use to minimise any confusion about the rights and responsibilities of both parties by documenting the agreement between you at the time of the leave being granted. All documentation should be provided in reconciliation of the final payment to ensure transparency.
If in doubt, we encourage you to seek professional accountant assistance to finalise termination payments.
Date reviewed: 15 September 2024