A Tenant Doctor™ arrangement is a model in which a medical practitioner conducts their own independent practice from premises occupied by a Facilities Service Provider. The Facilities Service Provider supplies administrative services. The practitioner is not an employee or contractor of that entity. The practitioner pays for premises and administrative support under a service agreement.
Independent practice
The practitioner conducts their own clinical practice. The Facilities Service Provider occupies the premises and supplies administrative services.
Service agreement
The practitioner pays for premises and administrative support under a written agreement. That document is not an employment contract and it is not a contractor engagement.
Payroll tax
Where the arrangement is genuine and correctly documented, the Facilities Service Provider entity may be deemed not eligible for payroll tax on amounts paid to independent practitioners. That outcome is fact-specific. It is not automatic.
Responsibilities
A correctly documented arrangement can make each party's medico-legal and privacy responsibilities clearer. It does not remove clinical responsibility from the practitioner.
What the arrangement is not
A Tenant Doctor™ arrangement is not employment. It is not a contractor engagement by the Facilities Service Provider. The practitioner is not conducting the Facilities Service Provider's clinical practice. Calling the practitioner "our doctor", or treating the Facilities Service Provider as the practitioner's employer, works against the characterisation the documents are trying to record.
The Facilities Service Provider occupies the premises and supplies administrative services to independent practitioners. Medical practice law is the area of law. It is not the name of the entity.
Payroll tax turns on facts, not labels
Whether a Facilities Service Provider is liable for payroll tax turns on the facts of the arrangement and the legislation and rulings in the relevant State or Territory. Wording in a contract is not enough on its own.
When properly structured, a Tenant Doctor™ arrangement is directed at the Facilities Service Provider being deemed not eligible for payroll tax. We draft and review the documents. We do not guarantee an assessment outcome.
A commercially realistic fee for identified premises and administrative services can support a genuine service relationship. A residual share of practitioner billings, with no relationship to the cost of those services, looks like something else. So does an arrangement that exists only on paper while the practitioner is on the Facilities Service Provider payroll, or while that entity directs clinical work.
What the service agreement should cover
The written agreement should make the relationship capable of being explained, payment by payment. Characterise the service fee, the room fee, any marketing levy, any collection of Medicare benefits, and any locum or covering payment separately.
- 1
The parties and the premises
Name the Facilities Service Provider entity, the practitioner (or the practitioner's entity), and the premises from which the administrative services are supplied.
- 2
What is being paid for
Describe the premises and administrative services as services. Price them as a genuine fee for those services. Do not leave a single bundled figure that cannot be split between room, administration and anything else.
- 3
Independence in fact
The agreement should match how the arrangement actually runs: clinical control, patient relationships, branding, rosters, and who employs the administrative staff.
- 4
Records and privacy
Say who holds patient records, who is the APP entity for those records, and how access works when the arrangement ends.
- 5
Insurance
Record who must hold professional indemnity and public liability cover, and to what minimum level.
- 6
Ending the arrangement
Set notice, handover of records, outstanding fees, and what happens to branding and access on termination.
Medico-legal and privacy
A correctly documented Tenant Doctor™ arrangement can separate the practitioner's clinical practice from the Facilities Service Provider's administrative services. That can support a payroll tax non-eligibility analysis and can make each party's medico-legal responsibilities clearer. It does not remove clinical responsibility from the practitioner, and it does not guarantee any payroll tax outcome. Privacy obligations still have to be allocated in the documents and followed in the way records are actually held.
Risks if the arrangement is not genuine
Failure to structure and operate the arrangement correctly exposes the Facilities Service Provider entity to significant risks:
- Payroll tax audits and assessments against the Facilities Service Provider entity, including interest and penalties
- A relevant-contract or deemed-employment finding if the facts do not match the documents
- Privacy and records disputes if responsibilities are left unclear
- Disputes over whether the practitioner is an employee, a contractor, or an independent tenant
- Medico-legal exposure if the Facilities Service Provider is treated as directing clinical work
How we help
When properly structured, a Tenant Doctor™ arrangement is directed at the Facilities Service Provider being deemed not eligible for payroll tax. We draft and review the documents. We do not guarantee an assessment outcome.
- Draft Tenant Doctor™ service agreements for Facilities Service Providers and independent practitioners.
- Review existing arrangements against how the premises and administration actually run.
- Advise on restructuring where the documents and the facts have drifted apart.
Related reading
Learn more about payroll tax and medical practice law.