A Guide to General Practitioner Employment Terms and Contracts in Australia

September 26, 2025

Receiving a job offer is an exciting milestone at the end of what can often be a lengthy recruitment process to secure a position as a general practitioner in Australia. However, a sense of relief and urgency to sign the offer documents should not distract attention from a careful and thorough review of the terms of the employment agreement.

This document sets the foundation for your professional relationship with a practice. A clear understanding ensures your role meets both career and lifestyle expectations.

This practical guide helps General Practitioners to identify the key clauses, common pitfalls, and negotiation points.

The Job Offer

After the long process of job applications, interviews and reference checks, a job offer for a general practitioner (GP) position in a promising medical practice can be a most welcome relief. However, candidates should not allow the initial excitement to cloud their judgement and before signing the job offer, close consideration must be given to the terms of the employment agreement.

This agreement is the foundation of the relationship between the medical practice and the medical practitioner and determines the course of their working relationship. It must cover the important issues of financial compensation, mutual obligations, annual leave and superannuation as well as the often overlooked matters of scope of practice, continuing medical education and restraint areas and durations.

Any issues of concern should be raised and addressed before signing the agreement as renegotiating terms after signature is challenging and sometimes impossible. Legal advice should be sought where appropriate.

The Essentials: Key Clauses in a GP Employment Contract

Each medical practice has its own employment agreement and although these vary to some degree, there are core provisions essential to all agreements which define the working relationship between the GP and the practice. Financial compensation, billing, superannuation, working hours, leave and professional regulatory requirements must be incorporated into the terms of the agreement whilst relocation allowances and restraint areas and durations may not be.

1. Remuneration, Billings, and Superannuation

Financial remuneration tends to be the prime consideration of most GPs and this must be set out unambiguously in the contract. There are three remuneration models which can be used by medical clinics with varying advantages and disadvantages to each:

Net Percentage Based Payment model: the most common model, which is a fee for service structure dependent upon physician activity with deductions for administrative and property expenses.
Fixed Salary Model: this is quite rare in Australian general practice.
Hybrid Model: Income Guarantee + Percentage, usually limited to first 6 months of contract to provide some financial security to GPs joining a new practice whilst they build a patient base.

Before we compare these models, we shall review the operating model for most general practice clinics in Australia.

The Role of the Service Entity

In Australia, many primary care medical practices are managed and operated by a "service entity". The service entity is a private company, usually a limited company, which owns or leases the clinic premises, employs support staff, and manages the practice administration including patient billing. The service entity may operate a single clinic or several clinics within a state and the larger ones operate clinics across many or all states of Australia.

Rather than employing GPs directly, the service entity charges a service fee for the use of the facilities and staff. GPs are typically engaged as independent contractors and bill Medicare and private patients under their own provider number. Total revenue per practitioner is dependent upon activity level with each item of service attracting a fee (billable activities include patient consultations and performance of procedures).

Service fees typically range from 20-35% of billings. This model is often slightly confusing and unfamiliar to GPs from countries such as the UK where many GPs are salaried or operate on the basis of a capitation model with income dependent upon the number of patients registered with the practice, rather than activity levels. However it is straightforward and generally transparent but it does require a solid patient base to generate the expected income levels and this may take time to build in a new country or location. To resolve initial hesitancy and risk, some service entities offer a hybrid model of remuneration with a guaranteed income for the first few months of a contract. This allows a new GP to develop a patient clientele and generate reliable revenue streams.

The self employed contractor status has implications for tax liabilities, insurance and superannuation which we shall consider below.

Services Provided by the Service Entity

The services provided by the service entity cover management of the clinic property, equipment and administrative staff. These vary by company but the following are standard:

Provide receptionist and administrative services during normal operating hours including the following:

billing, Medicare and Centrelink support;
general accounts management and bookkeeping;
handling of correspondence, filing and patient file management;
word processing;
appointment scheduling and calendar management;
telephone calls handling
patient management
other general administrative support;
nurses.

Providing a serviced office and surgery facility including the following:

cleaning
stationery (printing paper, ink cartridges, envelopes, letterhead and any other miscellaneous office supplies)
IT and communication facilities (computer terminals,computer printers, fax machines, access to computer software used by the practice including medical software, word processing applications and email)
medical practice supplies and equipment for the Medical Services
office and medical practice furniture
tea and coffee in tea room; and
advertising, which if it includes a reference to the Practitioner must only be with the consent of the Practitioner.

The Net Percentage Based Payment Model

The Net Percentage Based Payment is the standard and most prevalent model of financial compensation and is based upon a simple formula, calculated as the Patient Fees minus the Service Fee.

Formula: Net Payment = Patient Fees – Service Fee (percentage deduction)

Patient Fees: defined as the total of all fees billed for medical services, including Medicare rebates and private billing.
Service Fee: defined as an agreed percentage deduction by the service entity to cover clinic overheads such as nursing staff, administration, clinic lease and maintenance, IT infrastructure and equipment.
Net Percentage Based Payment: the GP's income after the deduction of the service fees, generally reconciled and paid fortnightly.

A Worked Example

ITEM	AMOUNT (AUD)	NOTES
Total Patient Fees (fortnightly)	$40,000	Includes Medicare rebates and private billing
Service Fee (35%)	$14,000	Covers practice overheads, staff, systems, and facilities
Net Percentage Based Payment	$26,000	Paid to GP, usually within 7–14 days of reconciliation

Collection of Patient Fees

Most GP contracts include provisions setting out the method of patient fees collection and management. Whilst the GP is responsible for the provision of medical services and fees generated under his or her provider number, the service entity acts as the agent of the GP in patient billing and fee collections.

Appointment of the Service Entity as Agent:
The GP usually authorises the service entity to:
Render invoices to patients.
Liaise with Medicare Australia and private insurers to process rebates and claims.
Collect patient fees and deposit them into the service entity’s account for reconciliation.
Reconciliation of Accounts:
Patient fees collected are reconciled against the GPs billings, with the service fee deducted. The net amount is then paid to the GP in accordance with the agreed schedule (commonly fortnightly).
DNA (Did Not Attend) Fees:
Some contracts specify that non-attendance fees may only be pursued at the discretion of the practice manager. This can affect the GP's billings, so it is important to know the practice’s policy.

What to check:

Is it clear that the service entity is acting as your billing agent?
How often are accounts reconciled, and will you receive transparent reports?
Who decides whether DNA fees are applied?

Why it matters:
Clarity on the billing process ensures confidence in the accuracy of payments and avoids disputes about income.

Superannuation Contributions

Superannuation obligations are governed by the Superannuation Guarantee Charge Act 1992 (Cth) and the Superannuation Guarantee (Administration) Act 1992 (Cth), along with related regulations.

If you are an employee, the practice must pay compulsory contributions (currently at least 11%).
If you are an independent contractor, contributions may still be required if you are deemed to be working “wholly or principally for labour” under the legislation.
Your contract should state clearly whether the practice will make contributions or whether you are expected to arrange these yourself.

This is both a financial and a compliance issue which must be clarified before signing the agreement.

A Comparison of Remuneration Models

Feature	Net Percentage Based Payment	Fixed Salary Model	Hybrid Model (Income Guarantee + Percentage)
Earnings Potential	Varies with billings; can be higher with strong patient flow	Predictable and stable, regardless of patient numbers	Security of minimum income + Upside if billings exceed guarantee
Risk	Income fluctuates with patient demand and billing efficiency	Low Risk: guaranteed income	Moderate Risk: guarantee cushions slower periods
Incentives	Strong Incentive to increase billings	Less direct incentive to increase billings	Balanced - incentive to grow patient base but safety net in place
Leave Entitlements	Usually self funded (Contractor Arrangement)	Employer funded leave (annual, sick and study leave)	Depends upon whether structured as contractor or employee
Tax and Superannuation	GP responsible for own tax and superannuation	Employer manages PAYG tax and superannuation	Varies by agreement and must be clarified in the contract
Flexibility	Greater autonomy over hours and workload	More structured with set hours and expectations	Flexible but subject to meeting guarantee conditions
Best Suited For	Experienced GPs with established patient demand with	GPs seeking stability and security, often joining a new workforce	GPs transitioning into a new area, new practice or returning to practice after leave

2. Hours of Work and Leave Entitlements

The contract should specify the work schedule with expected sessions or hours per week, along with any after-hours or weekend duties. It should also detail entitlements to annual leave (usually at least 4 weeks) and professional development leave (commonly 1 week). For contractor arrangements, leave is often unpaid unless negotiated.

Here is an example of a work schedule which provides the contractor GP with some degree of flexibility:

Thirty Eight (38) hours per week to be worked during the period Monday to Friday, 8.00am to 6.00pm; and
Otherwise minimum work hours will be determined as agreed in writing between the parties from time to time.
Minimum Days: 5 per week
Minimum Weeks: 44 per year

3. Performance and Quality of Medical Services

Most contracts define the scope of medical practice to be provided, any additional duties and include provisions regarding professional standards of care. These clauses ensure compliance with law, regulation, and internal practice policies.

Clinical Duties: a clear definition of core GP responsibilities.
Additional Roles: Supervising registrars, teaching, or administrative duties should be explicitly stated. Beware of vague wording such as “other duties as required.”

Key obligations include:

Responsibility for the provision of Medical Services: the GP is wholly responsible for the clinical services provided.
Standards of Care: Services must be delivered competently, lawfully, safely, efficiently, and professionally.
Licensing and Registration: the GP must hold and maintain all necessary qualifications, licences, and professional registration with the Australian Health Practitioners Regulation Agency ( AHPRA).
Ongoing Professional Development: the GP is expected to maintain professional qualifications and training up to date at his or her own expense, in line with CPD and AHPRA requirements.
Compliance with Practice Policies: the GP must adhere to the service entity’s policies on WHS, discrimination, harassment, and IT use, even if these do not legally form part of the contract.
Work Health and Safety (WHS): Compliance with all national and state WHS laws is mandatory.

4. Insurance

GP contracts in Australia usually contain clear obligations regarding insurance. These clauses are designed to protect both the practitioner and the service entity, as well as ensure compliance with Australian law.

Typical requirements include:

Professional Indemnity Insurance: At least $20 million cover, maintained throughout the contract and for up to six years afterwards. This is to cover all medical malpractice claims and in most contracts the practitioner must indemnify the service entity in respect of any Claims in respect of any injury (including illness) or death of any person as a result of any act or omission of the Practitioner in connection with the provision of the Medical Services to Patients.
Workers’ Compensation Insurance: If required by law, depending on whether the GP is classified as an employee or contractor.
Other Insurance: Any other cover required by law, such as public liability.
Evidence of Cover: You must provide certificates of currency when requested.

Why it matters:
Insurance clauses are essential to safeguard the GP's clinical practice, protect against medico-legal risk, and ensure compliance with contractual and regulatory requirements.

5. Relocation Packages

Some GP contracts include a relocation package to support practitioners moving interstate or internationally. These incentives are helpful to reduce the upfront costs of relocation but often come with repayment obligations should you leave the practice before the end of the minimum contract duration.

The typical structure of a $20,000 allowance:

Staged Payments:
$5,000 on submission of the PEP application (within 4 months of signing).
$2,500 on submission of the AHPRA application (within 8 months of signing).
$2,500 upon visa grant and commencing within 12 months.
$10,000 one month after the official commencement date.
Repayment: If you leave within two years, you must repay the entire relocation package within 14 days.
Currency: Payments are in AUD.

What to check:

Are the milestones achievable for your circumstances?
Is the repayment clause proportionate and fair?
Does the package cover flights, shipping, or accommodation, or is it a fixed cash benefit?

Why it matters:
Relocation packages provide valuable support but can become a liability if you exit early. Understanding the repayment conditions is vital before accepting.

6. Potential Red Flags to Watch For

While most contracts are standard and straightforward, the documents should be read thoroughly for any unexpected, ambiguous or unusual terms.

Vague or Ambiguous Wording: avoid unclear terms such as “reasonable administrative duties.” Seek clarification of the issues and request that the clause is redrafted appropriately.
Restraint of Trade Clauses: these are common restrictions intended to reduce competition and patient poaching. Check radius (5–10 km) and duration (6–12 months) and ensure that these are reasonable and not unduly onerous.
Indemnity and Insurance: confirm who pays for cover and the level of cover required.
Superannuation Compliance Risks: even contractors may trigger compulsory super obligations under legislation.

8. Seeking Advice and Negotiating Terms

An employment contract is a two-way agreement. Many terms are negotiable, and reputable employers expect constructive discussion. For complex agreements, seek advice from a solicitor specialising in employment law and medical contracts who can highlight risks, explain implications, and ensure that your interests are protected.

Remain wary of employers who refuse to negotiate terms or seek to impose terms which are unfair.

9. Final Checklist: Top 5 Things to Check in Your GP Contract

Before signing and agreement, ensure that you have clarity on the following issues:

Remuneration Model: Net percentage, fixed salary, or hybrid? If a hybrid model is offered, confirm if it is of a fixed duration and if so for how long?
Service Fee: What service fee is deducted, and what does it cover?
Superannuation Obligations: Will the practice make contributions, or must you? Are the terms compliant with legislation?
Hours and Leave: What are the expected hours and leave entitlements? Are after-hours duties required and paid?
Scope of Duties: Are your responsibilities clearly defined, or is vague wording used?
Restrictive Clauses, Insurance, and Relocation – Are restraints fair? Who pays for indemnity cover? What are the relocation expenses covered and the repayment terms for relocation support?

A thorough review is not about being difficult or obstructive. It is about starting a professional relationship on the right footing, with clarity and mutual understanding and resolving potential issues before they escalate into a conflict.

GP Jobs in Australia

Search for GP jobs in Australia or register your CV with us for future openings.

More information about GP work in Australia.

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