Negotiation of Financial Compensation for GP Jobs in Australia
Candidates considering General Practitioner positions in Australia will quickly notice that few positions offer salaries. The majority of General Practitioners are self employed, billing patients directly, then paying the practice a service fee for providing rooms, reception staff, nurses, equipment, and other overheads.
Negotiating under this model requires a slightly different approach from a standard employment contract. Here’s how to make sure you secure the best possible terms.
General Practitioner Jobs in Australia
Most general practitioners in Australia work in practices which are owned or leased and operated by companies or partnerships, termed the "service entity". The service entity manages the facility, provides equipment and administrative and nursing staff and manages patient scheduling and billing. The general practitioner provides medical services and pays the service entity a service fee which is a percentage of total billings. This model offers independence, but also requires careful negotiation to ensure a balance of strong revenues with adequate administrative support.
In our article on general practitioner contracts, we looked in more detail at the role of the service entity and terms of the contact between the general practitioner and the service entity. In this article we shall focus exclusively on the negotiation of the financial compensation model.
General Practitioner contracts are commercially straightforward. Revenue is activity dependent with a fee billable to patients or their insurers for each chargeable service. A percentage of total revenue is then due to the service entity. This is commonly 25%-35% but may reach 40% or be as low as 20%, although this is quite rare. The range of revenue percentage due to the service entity is variable and often negotiable hence it is worth researching the factors which contribute to this variability and how these factors may be managed to influence liabilities.
Step 1: Understand the Model of Patient Billing
The prime determinant of revenue streams and service fees due is the billing model of the clinic. General Practice Clinics have three operating models: bulk billing, mixed billing or private billing, depending upon their acceptance or not of the Medicare rebate as the full payment for the medical service. Bulk billing practices usually have high patient volumes but low fees whereas private billing practices have higher fees but lower patient numbers.
Medicare Australia
Medicare Australia is the country's universal health insurance scheme run by the Australian Government through Services Australia. It provides subsidised or free healthcare services to all Australian citizens and permanent residents, as well as some international visitors, by covering costs of medical services.
The Medicare Benefits Schedule (MBS) lists the services Medicare subsidises which includes GP consultations, specialist consultations, surgical procedures, radiological and pathology investigations and and some prescriptions. Eligible individuals receive a Medicare Card which is used to access medical services.
Bulk Billing Clinics
In bulk billing clinics, the general practitioner (GP) accepts the Medicare rebate as the full payment for the patient consultation or other service. The practice handles the billing directly with Medicare, and the patient has no out-of-pocket costs. This appears straightforward but for many years, the Medicare rebate paid to GPs has not keep pace with the rising costs of running a medical practice making it financially unviable for many clinics to rely on bulk billing alone.
Bulk billing practices rely on high patient volumes to generate sufficient revenue to cover operating costs. However for many clinics, this is a challenge and bulk billing clinics have largely been replaced with mixed billing clinics which can increase revenues by charging higher fees for which the patient pays a cost.
Recent government incentives have aimed to boost bulk billing rates, particularly for certain patient groups. Data published in 2024 and 2025 showed that these incentives have led to some increases in bulk billing rates across the country.
Bulk billing rates can vary significantly by area. Data from 2023 showed that New South Wales had the highest annual GP bulk billing rate at 82%, while the Australian Capital Territory had the lowest at 53%.
Mixed billing Clinics
This is the most common model of primary care clinic. Mixed-billing practices bulk bill certain patients while privately billing others. For example, they may continue to bulk bill children under 16, pensioners, and concession card holders, while other patients pay a private fee. This boosts fee revenues and enhances the financial viability of the clinic.
Private billing Clinics
Some clinics are entirely private-billing and patients pay the full fee upfront. The practice can then process the patient's Medicare rebate which is refunded to the patient who is left to fund the out-of-pocket "gap" payment.
A Comparison of Clinic Billing Models and Service Fees and their impact on net income
This table contrasts the three clinic billing models with variable service fees to demonstrate their impact on weekly GP billings and net revenue after the deduction of service fees. The key insight is that a small difference in billing model or service fee percentage can translate into thousands of dollars in net weekly income, hence GP candidates should always consider both the billing structure and the practice’s support package and service fees.
| Practice Type | Location | Weekly Billings | Service Fee | Net Income | Notes |
|---|---|---|---|---|---|
| Bulk-Billing Clinic | Perth (Metro) | AUD $8,000 | 35% (AUD $2,800) | AUD $ 5,200 | High patient volume but lower consult fee per patient |
| Mixed-Billing Clinic | Sydney (Metro) | AUD $10,000 | 38% (AUD $3,800) | AUD $ 6,200 | Higher fee per consult, strong admin and nurse support maximises billings |
| Private-Billing Clinic | Regional Queensland | AUD $ 12,000 | 30% (AUD $3,600) | AUD $ 8,400 | Higher patient fees, lower patient numbers and lower service fees |
Step 2: Review the Practice Location
The location of the medical practice has an important bearing on both fee revenues and service fees. The model of patient billing in general practice clinics varies by location across Australia. Rural and remote areas and areas of lower socioeconomic status have increased rates of bulk billing clinics whilst the major cities have the majority of private clinics. Recent data indicates bulk billing rates have also recently increased in certain states due to government incentives targeting specific patient groups.
Rural and regional posts often offer lower service fees or additional incentives to attract doctors and this can be significant in determining net income.
Factors which increase the likelihood of bulk billing:
- Remote locations: Very remote areas consistently have higher bulk billing rates compared to major cities. However, out-of-pocket costs for non-bulk-billed visits are also typically higher in remote regions.
- Socioeconomic status: Bulk billing rates are generally higher in areas with a lower socioeconomic status.
- Certain patient groups: Doctors are more likely to bulk bill specific patients, especially after the introduction of new government incentives in November 2023. These groups include:
- Children under 16
- Concession card holders
- Pensioners
States with higher bulk billing rates:
- New South Wales: In 2023, NSW had the highest annual GP bulk billing rate of any state or territory, at 82%. The outer metropolitan area of Sydney also has electorates with very high rates of bulk billing.
- Northern Territory: The NT has historically had high bulk billing rates, particularly in very remote areas. In late 2023 to 2024, the rate increased further, particularly for children under 16.
- Queensland: Queensland has also seen recent increases in bulk billing rates. Some remote LGAs in Queensland, such as Woorabinda, have some of the highest bulk billing rates in the country.
- Tasmania: Bulk billing rates in Tasmania had been low but have recently seen a significant increase, particularly for children under 16.
States with lower bulk billing rates
- Australian Capital Territory: In 2023, the ACT had the lowest bulk billing rate in Australia at 53%, continuing a long-term trend.
- Western Australia: Some inner-metropolitan electorates of Western Australia, such as Curtin, have had low bulk billing rates.
Step 3 : Consider AHPRA Registration Category and Additional Qualifications
In Australia, a general practitioner's professional registration category and additional qualifications and experience determine eligibility for specific, higher-paying Medicare Benefits Schedule (MBS) item numbers and thereby increase practice revenue. Whilst all GPs can provide general consultations, specialised skills permit additional billing for complex services which require specific training or procedural competency.
GPs who are eligible for specialist registration with the AHPRA and have enhanced skills and qualifications can leverage their increased revenue generation potential to negotiate reduced service fees.
Specialist (Vocational)Registration with AHPRA
AHPRA registration category is the most significant factor influencing fee revenue. General Practitioners may practise with general or specialist AHPRA registration but the specialist registration confers two major benefits:
- Higher Medicare rebates: Specialist GPs receive higher rebates for many services listed on the MBS compared to physicians with general registration.
- Eligibility for specific billing items: Eligibility for certain MBS item numbers is limited to specialist registered GPs. This is required for complex and specialised services, including chronic disease management.
Billing for specific areas of practice
Psychiatry
GPs with additional training in psychiatry can use specific MBS item numbers to bill for mental health treatment plans (MHTPs) and focused psychological strategies (FPS), which carry higher rebates.
- Without psychiatry training: A standard GP can create an MHTP and use items coded 2700 and 2701, which cover mental health services and management.
- With psychiatry training: A GP with specific psychiatry qualifications, such as FPS skills training, can use the higher-paying items coded 2715 and 2717 for MHTPs. They can also provide counseling services using FPS items 2721 and 2725.
Procedural services
For GPs in rural and remote areas, additional qualifications in procedural services directly lead to higher billing potential through the Practice Incentives Program (PIP).
- PIP Procedural GP Payment: This incentive payment encourages GPs to attain enhanced skills in secondary care hospital practice fields of obstetrics, emergency medicine, surgery, and anaesthetics. The payment has different tiers based on the volume and type of procedural services provided.
- Specific MBS item numbers: GPs trained in procedures such as skin excisions, wound care, or diagnostic tests including spirometry and ECGs can bill the specific MBS item numbers for these services.
Billing for complex care
Specialist registration and specific training in chronic disease management allow GPs to bill for higher-value MBS items, such as those related to:
- Health assessments.
- Chronic disease management plans.
- Team care arrangements.
Example comparison
The difference in billing is clear when comparing item numbers for similar services. For instance, a long consultation (40+ minutes) with a Specialist GP may attract a higher Medicare rebate than the same length consultation with a non specialist GP for specific complex conditions.
How additional qualifications are acquired
GPs who hold the Fellowship of the Royal Australian College of General Practitioners (FRACGP) or the Australian College of Rural and Remote Medicine (FACRRM) are eligible for specialist registration and hence the increased fee rates.
Additional training and qualifications can be obtained via the RACGP and ACRRM in rural and remote medicine, emergency medicine, anaesthesia, obstetrics and basic surgical procedures leading to diplomas and eligibility for enhanced levels of practice and fees.
Step 4 : Look Beyond the Fee Percentage
The GP's net income is the total fee revenue minus the service fee expressed as a percentage of the total fees, usually paid on a 2 weekly schedule. The service fee typically ranges from 20% - 40% of total fees but an average of 30% is common. However, the true value of the service fee is not just the percentage but lies in what the service fee includes. This should be clarified before signing an agreement and the following issues are important.
- Service Entity: Confirm the name and ABN company number of the service entity and ensure that the business is officially registered as a commercial entity and not subject to any restrictions or insolvency procedures. Ensure that multiple service entities or novel arrangements are not involved in the operation of the clinic.
- Facilities and equipment: Verify the clinic locations and their maintenance status. Clinics should be adequately maintained and equipped. What facilities are available (treatment rooms, diagnostics, minor procedures)? What equipment is standard? Are utility bills included?
- Staff Support: Confirm the level of staff support provided for administrative and nursing activities and ensure that staff numbers are actually sufficient to fulfil their function.
- Clinic Marketing: How does the clinic support patient demand? Does it advertise and if so how effectively? Does it have an established patient base?
- Leave Provisions: confirm if annual, study and sick leave entitlements are incorporated into the contract and whether financial compensation is due.
- Work Schedule: How much flexibility is there in your working hours? It is normal to have a minimum of 38-40 hours per week but extra hours at weekends and evenings may be optional.
- Initial Guarantee: Is there an initial minimum income guarantee (e.g., minimum billings or hourly income)? If so for how long does this apply?
- Relocation Expenses: Are these offered and if so how much and what do they cover? Is there a rebate for early contract termination?
Step 5: Negotiate Professionally
The relationship between physician and service entity is a business partnership entered into for mutual professional and commercial benefit. It is in the interests of both parties to act with trust and transparency and negotiate fairly. Prior to negotiating the terms of an agreement it is best to define your priorities and understand your own professional value then set out your red lines beyond which the deal cannot proceed.
The essentials which must be incorporated into the terms of the agreement are:
- Service fee percentage and exactly what it includes
- Any guaranteed minimum income during your start-up period and the duration of the guarantee
- Access to leave or CPD allowances
- Termination clauses and notice periods
General Issues to consider:
- Goals: define concise goals before commencing the negotiation process. Do you value a lower service fee or are you prepared to offset an existing fee with additional benefits such as CPD funding, increased leave or flexible hours? What is the maximum service fee you can tolerate?
- Leverage your value: specialist registration, additional qualifications and procedural competency will all increase your fee earning potential. This can be used to negotiate lower service fees or extra benefits.
- Added Value:
if the service fee is non negotiable, look for added value through extra equipment, more staff, training, or marketing.
Final Thoughts
With a sound understanding of the medical clinic billing model and personal fee earning potential, most GPs should be able to achieve a contract which offers an appropriate net fee income and decent working environment. We assist GPs to navigate these negotiations and secure roles which match their career and lifestyle goals. Should you be interested to work in Australia as a GP, please review the currently advertised
jobs or
upload your CV.
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