Most health services in Australia are GST-free through one of two doors. A medical service is GST-free if a Medicare benefit is payable for it, or if it's supplied by or on behalf of a medical practitioner or approved pathology practitioner and is generally accepted in the medical profession as necessary for the appropriate treatment of the patient. Outside that, the law lists 21 "other health services": physiotherapy, psychology, dental, optometry, podiatry and more, that are GST-free when supplied by a recognised professional as appropriate treatment. But GST-free isn't automatic for everything a practice bills: cosmetic procedures with no Medicare benefit, reports for insurers, employers and lawyers, and services that aren't on the list: massage, counselling, personal training, carry 10% GST. And because GST-free sales count toward the $75,000 registration threshold, a busy GST-free practice can still be required to register.
Register for GST →5-minute form · usually done in 4 business hours
Door one: medical services.
The GST law gives "medical service" two limbs, and clearing either one makes the service GST-free:
| Test | What it covers |
|---|---|
| A Medicare benefit is payable for the service | GST-free full stop: bulk-billed or privately billed with a gap, and no need to ask why the service was performed |
| No Medicare benefit, but the service is supplied by or on behalf of a medical practitioner or approved pathology practitioner and is generally accepted in the medical profession as necessary for the appropriate treatment of the recipient | Most other genuine clinical care: consultations, procedures and pathology that Medicare doesn't happen to cover |
"On behalf of" matters in a practice: services a nurse or assistant performs as part of the doctor's supply: billed as a component of the practitioner's service, ride on the practitioner's GST-free treatment. The headline exception is cosmetic work: a procedure performed predominantly to improve the patient's appearance, with no Medicare benefit payable: a face-lift, tattoo removal, is taxable. The same operation done for medical or reconstructive reasons isn't cosmetic, and stays GST-free.
Door two: the 21 listed "other health services".
Not a medical practitioner? Then your service is GST-free only if it's one of the services on the statutory list: actually one of them, not merely similar to one:
| The listed other health services | ||
|---|---|---|
| Aboriginal or Torres Strait Islander health | Acupuncture | Audiology / audiometry |
| Chiropody | Chiropractic | Dental |
| Dietary | Herbal medicine (incl. traditional Chinese herbal medicine) | Naturopathy |
| Nursing | Occupational therapy | Optometry |
| Osteopathy | Paramedical | Pharmacy |
| Psychology | Physiotherapy | Podiatry |
| Speech pathology | Speech therapy | Social work |
Two further conditions attach. The supplier must be a recognised professional in that listed discipline: registered or permitted under a state or territory law covering the profession or, where no registration scheme exists, a member of a professional association with uniform national registration requirements. And the service must be generally accepted in that profession as necessary for the appropriate treatment of the recipient: routine clinical work qualifies; the profession's fringe activities may not.
The "listed, not similar" rule is where practitioners get caught. Massage therapy isn't on the list, so a massage therapist charges GST once registered, while a registered physiotherapist delivering hands-on treatment as physiotherapy is GST-free. Counselling by someone who isn't a registered psychologist or an accredited social worker, life coaching, and personal training all sit outside the list and are taxable. The discipline the service legally belongs to, not what it feels like, decides.
Who you bill matters: the third-party trap.
Everything above assumes you're treating a patient. Change who the supply is made to and the answer changes: where a business engages you, the supply is to that business, not the patient, and it's taxable, even though a patient sits in the room. That's why:
| Engagement | GST treatment |
|---|---|
| Treating your own patient, patient (or Medicare) pays | GST-free: the ordinary case |
| Pre-employment medical billed to the employer | Taxable: the supply is to the employer, not treatment of your patient |
| Medico-legal report for a solicitor or court | Taxable: a report is not appropriate treatment of the person examined |
| Treatment billed to an insurer, workers compensation or CTP scheme operator, or an Australian government agency | GST-free to the extent the underlying service to the patient is GST-free: section 38-60, since 1 July 2012 |
Section 38-60 is the saving grace for treatment funded through insurance: since 1 July 2012, a supply to an insurer settling a claim, a statutory compensation or compulsory third party scheme operator, or an Australian government agency is GST-free to the extent the underlying supply of the health service to the patient would itself be GST-free. Treat a workers compensation patient and bill the scheme, and the physiotherapy stays GST-free. Write an assessment report about that patient for a lawyer running the dispute, and you're back to taxable: the report was never treatment.
NDIS supports: GST-free with paperwork attached.
Supports supplied to an NDIS participant are GST-free under their own provision, section 38-38, and it's strict about the paperwork. All four conditions must hold:
1. The participant has an NDIS plan in effect.
2. The supply is of reasonable and necessary supports specified in the statement of supports in that plan.
3. There's a written agreement: between you and the participant, or you and another person such as a plan manager, that identifies the participant and states the supply is of supports under the plan.
4. The support is of a kind covered by the NDIS Determination: the current determination applies to supplies made before 1 July 2027.
The edges are sharp: supply more hours or quantity than the plan specifies and the excess isn't GST-free; work without the written agreement and the exemption fails even for supports squarely inside the plan. Providers billing plan managers should make sure the service agreement does the section 38-38 work in writing before the first invoice.
Goods: medical aids, appliances and what you hand the patient.
Goods have their own tests. A medical aid or appliance is GST-free when all three conditions are met: it's listed in Schedule 3 to the GST Act (or the GST regulations), it's specifically designed for people with an illness or disability, and it's not widely used by people without one. Qualifying items: wheelchairs, hearing aids, and the rest of the schedule, are GST-free at every point in the supply chain, manufacturer to consumer, no prescription needed, and hiring one out is GST-free on the same footing. Spare parts specifically designed for a GST-free aid are GST-free; generic parts: standard batteries for an electric wheelchair, are taxable.
Goods supplied during a consultation follow the service in limited cases: herbs dispensed by a recognised herbal medicine practitioner or naturopath are GST-free only if they're completely used or consumed during a GST-free consultation. Products sold to take home: supplements off the shelf, retail skincare at the clinic, are ordinary taxable sales, whoever sells them.
The registration trap: GST-free still counts toward $75,000.
Here's the part that surprises allied health sole traders every year: GST turnover includes GST-free sales. Only input-taxed supplies are left out of the count. A physiotherapist billing $110,000 of entirely GST-free consults has a GST turnover of $110,000: over the $75,000 threshold, and must register for GST within 21 days of becoming aware they'll cross it, even though registration won't add a cent of GST to a single patient invoice.
The good news is that registration usually works for a GST-free practice, the way it does for exporters: you charge no GST on your GST-free services but claim full GST credits on rent, equipment, insurance, software and supplies, so the quarterly BAS typically pays you a refund. The compliance job is real (a BAS every cycle, records kept, tax invoices for claims over $82.50) but the arithmetic is friendly. The practices that need care are mixed ones: a clinic doing GST-free physio alongside taxable massage or retail products must split its invoicing and code every sale correctly, because charging 10% on a GST-free consult overstates GST owed, and leaving it off a taxable massage understates it. Both end in BAS corrections.
Quick answers.
Are medical services GST-free?
Generally yes, through one of two tests. A service is a GST-free medical service if a Medicare benefit is payable for it: bulk-billed or not, or if it's supplied by or on behalf of a medical practitioner or approved pathology practitioner and is generally accepted in the medical profession as necessary for the appropriate treatment of the patient. The main exception is cosmetic work: a procedure done predominantly to improve appearance, with no Medicare benefit payable, is taxable, while the same operation done for medical or reconstructive reasons stays GST-free.
Which health services are GST-free?
Beyond medical services, the GST law lists 21 'other health services' that can be GST-free: Aboriginal or Torres Strait Islander health, acupuncture, audiology and audiometry, chiropody, chiropractic, dental, dietary, herbal medicine (including traditional Chinese herbal medicine), naturopathy, nursing, occupational therapy, optometry, osteopathy, paramedical, pharmacy, psychology, physiotherapy, podiatry, speech pathology, speech therapy and social work. The service must be supplied by a recognised professional in that discipline and be generally accepted in the profession as necessary for the appropriate treatment of the patient. A service merely similar to a listed one doesn't qualify.
Is massage therapy or counselling GST-free?
Generally no. The ATO's position is that the service must actually be one of the 21 listed health services, not just similar to one. Massage therapy, counselling by someone who isn't a registered psychologist or accredited social worker, personal training and most wellness services aren't on the list, so they're taxable once the provider is registered for GST. The same treatment can change status with the practitioner: remedial work performed by a registered physiotherapist as physiotherapy treatment can be GST-free, while the same hands-on hour sold as massage by a massage therapist is not.
Do I charge GST on reports for insurers, employers or lawyers?
Usually yes. GST-free treatment hangs on supplying appropriate treatment to the patient, when a business engages you, the supply is to that business, not the patient, and it's taxable. Pre-employment medicals billed to the employer and medico-legal reports for a solicitor carry 10% GST even though a patient is examined. The big exception is section 38-60: since 1 July 2012, a supply to an insurer, a statutory compensation or compulsory third party scheme operator, or an Australian government agency is GST-free to the extent the underlying service to the patient would itself be GST-free, which keeps most workers compensation and CTP-funded treatment GST-free.
Are NDIS supports GST-free?
Yes, when all four conditions of section 38-38 are met: the participant has an NDIS plan in effect, the supply is of reasonable and necessary supports specified in that plan, there's a written agreement between the provider and the participant (or another person) identifying the participant and stating the supply is of supports under the plan, and the support is of a kind covered by the current NDIS Determination, which applies to supplies made before 1 July 2027. Supports beyond what the plan specifies, or supplied without the written agreement, lose the GST-free treatment.
Do I need to register for GST if all my services are GST-free?
Quite possibly. GST turnover includes GST-free sales, only input-taxed supplies are excluded, so a physio or psychologist billing over $75,000 a year must register even though every consult is GST-free, within 21 days of becoming aware they'll cross the line. Registration usually works in your favour here: you add no GST to patient fees but claim back the GST on rent, equipment and software, so the BAS typically pays a refund. Our BAS-agent service is $119 + GST if you'd rather have it reviewed and lodged for you, with backdating up to 4 years +$25 + GST.
Are medical aids and appliances GST-free?
Yes, if three conditions are all met: the item is listed in Schedule 3 to the GST Act or the GST regulations, it's specifically designed for people with an illness or disability, and it's not widely used by people without one. Qualifying items: wheelchairs, hearing aids and the like, are GST-free at every point in the supply chain, from manufacturer to consumer, and hiring one out is GST-free too. Spare parts specifically designed for a GST-free aid are GST-free; generic parts, like standard batteries for an electric wheelchair, are taxable.
Related guides: Do I need to register for GST? · Crossing the $75,000 threshold · GST-free supplies · When to charge GST · How GST credits work · GST for not-for-profits · GST on education and childcare · What is a BAS?
Practice crossing $75,000? Registered in ~4 business hours.
Reviewed and lodged by Registered BAS Agent 25972850 · $119 + GST, tax deductible · backdating up to 4 years +$25 + GST · free help on 1800 546 526.