Many people are under the impression that GPs are employed either by a clinic or directly by the government and receive a wage or salary. While this can be true, the vast majority of GPs in Australia operate as sole traders on a fee-for-service basis, i.e. we are paid directly by our patients for the services we provide. We pay a clinic for services they provide to us, such as use of a consultation room and reception team. Like sole traders in any other industry we do not get paid annual leave, sick leave, or superannuation.

Medicare is a health insurance scheme funded by the Australian federal government. Medicare will reimburse patients a set amount of money for specific out-of-hospital health services. The amount by which the government will subsidize a service is outlined in the Medicare Benefits Schedule which is freely accessible online. Some examples of services and rebates include:

• Item 23: a typical GP consultation lasting longer than 6 minutes but less than 20 minutes

  • Medicare rebate: $43.90 (January 2026)

• Item 2715: a GP consultation for preparing a Mental Health Treatment Plan, lasting between 20 and 40 minutes

  • Medicare rebate: $106.20 (January 2026)

When a doctor 'bulk bills' a service, they are agreeing to accept the patient's rebate directly from the government instead of taking payment from the patient and having the patient claim their rebate from Medicare.

• Typical billing: patient pays the GP → Medicare pays the rebate to the patient

• Bulk billing: Medicare pays the patient's rebate directly to the GP

Bulk billing incentives and bulk billing clinics

Previously, GPs would receive an incentive payment from Medicare if they bulk-billed eligible patients (concession card holders and children 16). From 1 November 2025, the Australian Government expanded eligibility to all Medicare-card holders.

Some clinics have registered for the Bulk Billing Practice Incentive Program (BBPIP) which grants further financial incentives if they agree to bulk bill every eligible service for every eligible patient. The BBPIP pays an extra 6.25% to the GP, and 6.25% to the clinic.

For some clinics, the above increases in funding are still not enough to cover the expenses of providing care.

An example

1. A patient sees a GP for a standard 15 minute appointment at a non-BBPIP clinic and asks to be bulk billed.

2. The doctor receives $43.90 (item 23) + $21.85 (bulk billing incentive) = $65.75.

3. The doctor pays ~35% to the clinic ($23.01) for use of the room, equipment and staff.

4. The doctor pays income tax of ~$15.81 to the ATO (using the 37% tax rate arbitrarily)

5. The doctor takes home ~$26.93

Individual doctors may find this take-home more or less acceptable depending on a variety of factors (to be discussed further in another post). What is less variable are the operational costs of running a clinic. $23.01 is often not enough to cover the clinic's operational costs for the service they provide. The clinic has two options:

1. Charge the doctor a larger service fee (e.g. 50%)

   • This is usually not very popular with doctors, who would typically look for a different clinic with a cheaper service fee.

2. Set a private fee for consultations, e.g.:

   • The doctor charges the patient $100 in line with the clinic's fee schedule

   • The doctor pays 35% to the clinic ($35)

   • The doctor pays income tax of ~$24.50

   • The doctor takes home ~$40.50