Buyers value GP practices on a multiple of normalised EBITDA. Published ranges vary from below 2 times to above 10 times, with recent healthcare transactions cited in the 3.2 to 6.5 times range. Buyers assess GP retention rates (currently 63% to 75% of billings), staff wages relative to billings, EBITDA trend, total annual billings and lodged tax returns.
Buyers assess GP practices against a set of financial benchmarks that indicate profitability, cost control, revenue stability and documentation quality. These metrics are not negotiable or optional. They determine whether a practice attracts serious interest, the speed of due diligence and the range in which offers land.
This post covers the benchmarks most applied in the Australian market. Where specific thresholds are cited, the underlying sources and their limitations are noted.
Valuation method
The standard method for valuing an Australian GP practice is a multiple of normalised EBITDA (earnings before interest, tax, depreciation and amortisation). Buyers calculate or reconstruct the normalised figure, apply a multiple and adjust for risk.
Published multiple ranges for Australian GP practices vary considerably, and no authoritative public dataset exists. The Health and Life accounting practice has documented historical ranges from below 2x to above 10x, depending on buyer type, market cycle and practice profile. Wyse Advisory, an Australian healthcare broker, has cited recent transactions in the 3.2x to 6.5x range across healthcare businesses, including GP practices. The Lloyds Brokers 2025 analysis cited healthcare sector benchmarks of 4x to 6x EBITDA for Australian businesses.
These figures should not be treated as a reliable range for any specific practice. Multiples are driven by factors including practice scale, location, billing model, GP tenure, lease terms and buyer category. Corporate consolidators, private equity vehicles and incoming GP owner-operators apply different risk frameworks and arrive at different numbers.
Specific valuation guidance requires formal assessment by a qualified valuer or accountant with experience in GP practice transactions. Practice owners should not rely on generic multiple ranges when deciding to sell.
Profitability benchmarks
Under the dominant Australian service fee model, GPs pay a percentage of their billings (or receipts) to the practice for administrative support services and retain the balance as income. The sum of each GP's service fee contributes to the income of the practice entity; other income sources that will supplement this income could be third-party rental (pathology, room rental, etc.), government incentives such as PIP and/or WIP, grants and other non-MBS-derived income (medical consumables, vaccines).
Current market data indicates GP retention rates have shifted upward. The RACGP states the current industry standard is approximately 63% to 75% of billings, depending on experience and qualifications. Alecto Australia's 2025 salary survey found that most practices pay 65% to 70%, with nearly a third of all GPs earning 70%. The Clinch Group's 2025 market analysis noted that GPs now typically receive 65% to 75%, up from 60% to 65% previously.
For sale-readiness assessment, profitability signals align roughly with these thresholds:
| GP retention | Practice share | Interpretation |
|---|---|---|
| 60% or less | 40% or more | Strong practice margin. Increasingly rare in the current market. May create GP recruitment or retention pressure if significantly below market rate. |
| 60-70% | 30-40% | Broadly consistent with market norms. Balances practice profitability against GP competitiveness. Most buyers treat this range as sustainable. |
| 70-75% | 25-30% | Common in competitive metro markets or for experienced VR GPs. Viable if patient volumes and ancillary income support adequate EBITDA. |
| Above 75% | Below 25% | Weak margin. Reliant on high throughput, pathology rents or other non-billing income. Unsustainable at above 85% unless offset by material ancillary revenue. |
The shift toward higher GP retention rates means practices operating at 30% to 35% service fees are now closer to the centre of the market, not the premium end. Buyers will benchmark the practice's service fee against current recruitment market expectations, not historical norms.
In addition to the service fee percentage, it is imperative to consider the gross income to which the service fee is applied. A base KPI would be the GP average gross billing per hour. This would be determined by the average fee per patient and the number of patients seen per hour, and it reflects the practice's billing philosophy.
The table below shows the variations that can occur between GPs, and if only the service fee is considered, the higher-fee contributor may be missed, i.e., the GP with the lowest service fee and the fewest patients per hour contributes the most to the practice.
| Avg fee/Pt | Pts/Hour | Avg fee/Hr | Hours/Week | Weeks/Yr | Annual income | Service fee (%) | Service fee ($) | |
|---|---|---|---|---|---|---|---|---|
| GP 1 | $55 | 5 | $275 | 30 | 47 | $387,750 | 40% | $155,100 |
| GP 2 | $85 | 4.5 | $383 | 30 | 47 | $539,325 | 35% | $188,764 |
| GP 3 | $120 | 4 | $480 | 30 | 47 | $676,800 | 30% | $203,040 |
Billing model and revenue stability
Buyers assess the billing model to understand revenue composition, pricing flexibility and exposure to Medicare policy changes.
The national GP bulk billing rate reached a low of 75% in October 2023 before recovering to approximately 78% of all GP attendances by late 2024 (AIHW, 2024). This recovery was driven in part by the tripled bulk billing incentive payments for concession card holders and children under 16, introduced on 1 November 2023. The federal government's $8.5 billion commitment to further increase bulk billing incentives from November 2025 will continue to reshape the billing landscape.
These policy changes affect how buyers interpret bulk billing ratios. A practice with a high bulk billing rate that is well-positioned to capture the enhanced incentives may have a more defensible revenue base than the same profile would have attracted two years ago. Conversely, the gap between bulk-billed and privately billed consultations is narrowing, which affects the premium previously attached to mixed billing models.
From 1 November 2025, the introduction of expanded access to Bulk Billing Incentive items will have a significant impact on many practices' income. Further opportunity to build income may be available with registration in the Bulk Billing Practice Incentive Program (BBPIP). The first round of payments was distributed in February 2026. It is estimated that there are approximately 7,500 general practices in Australia, and according to the Department of Health, 3,251 registered for BBPIP and 2,949 received a BBPIP payment. The average payment to each practice was just below $21,000. Practices that opted to register for the program will now need to review the financial results against not registering and continue to adopt a mixed or private billing policy.
Practices with mixed billing models or a clear capacity to adjust their billing approach still tend to attract broader buyer interest because they demonstrate pricing flexibility. However, the binary framing of bulk billing as a weakness is no longer reliable. The relevant question is whether the practice can demonstrate consistent profitability and predictable patient demand under the current and foreseeable rebate framework.
EBITDA trend
Buyers do not rely on a single year's result. They look for consistent or improving performance across at least two years to confirm that the business is stable and capable of sustaining income under new ownership.
A rising EBITDA trend signals effective cost control and sustained demand. A flat or declining trend raises questions about revenue leakage, cost growth, workforce instability or dependence on a departing principal GP. Any of these will attract deeper scrutiny and typically lead to lower offers.
GP owners who cannot describe their EBITDA trend or have no financial visibility expose a significant readiness gap. In sale-readiness terms, this is one of the most fixable weaknesses but also one of the most critical to address early. Clear financial trends underpin buyer confidence and negotiation strength.
Staff wages as a percentage of billings
Staff wages (excluding GP contractor payments) are one of the highest controllable costs in a GP practice. There are two common ways this is measured, and they produce different numbers.
Measured as a percentage of total practice billings (the gross amount billed by all GPs before service fee splits), the Prosperity Health benchmark survey reported an average of 19.7% across surveyed practices, with the top 20% of practices at approximately 14%. Measured as a percentage of practice revenue (the service fee income retained by the practice after GP payments), the Clinch Group's 2025 analysis reported staff wages at 25% to 30% of revenue.
These figures are not contradictory. Because practices typically retain only 25% to 35% of total billings as revenue, a staff cost of 20% of billings translates to roughly 60% to 80% of practice revenue. Buyers will assess both framings depending on how the financials are presented.
The practical test is whether staffing levels match patient demand and service delivery requirements without eroding margin. Practices that can demonstrate controlled labour costs while maintaining service quality and GP support are valued more highly.
Total annual billings
Total annual billings indicate practice scale and help identify the likely buyer type.
| Annual billings | Profile |
|---|---|
| Below $1 million | Small. Typically single or dual GP. Limited diversification, higher owner dependency. |
| $1-$2 million | Mid-sized. Moderate scale, likely mixed billing. |
| $2-$4 million | Larger. Multiple GPs, diversified income, lower owner dependency. |
| Above $4 million | Substantial infrastructure, multiple revenue streams, attracts corporate and institutional buyers. |
Larger practices attract more buyer interest because income is diversified and less dependent on any single GP. Smaller practices can still achieve reasonable outcomes if they demonstrate profitability, stability and a credible succession pathway.
Normalised EBITDA range
If known, the normalised EBITDA range provides the clearest indicator of valuation potential and buyer type.
| Normalised EBITDA | Profile |
|---|---|
| Below $150,000 | Small. Limited profitability, likely high owner dependency. |
| $150,000-$300,000 | Moderate profitability. Suitable for incoming GP owners or small corporate buyers. |
| $300,000-$500,000 | Strong profitability. Attracts broader buyer interest. |
| Above $500,000 | Scale, infrastructure and strong buyer demand from corporate and institutional acquirers. |
Buyers use the normalised EBITDA figure to calculate offer prices by applying a multiple. The multiple applied will depend on the factors outlined in the valuation method section above.
Tax return submission status
Up-to-date tax returns are among the simplest yet most decisive indicators of financial readiness. Buyers, brokers and accountants require at least three years of lodged returns to confirm income stability and reconcile reported figures with BAS and profit-and-loss statements.
Missing or delayed lodgements immediately raise questions about compliance, profitability, accuracy and timing risk. Tax returns provide verified, auditable data that underpin valuations and are mandatory for buyer due diligence and finance approval.
Unlodged returns create timing risk. If the most recent year's return is still pending, the accountant must complete it before the sale can proceed, which can delay valuation, contract signing and settlement.
EBITDA documentation status
Documented EBITDA is evidence that the practice can substantiate its financial claims. Buyers and financiers require a reconciled statement with supporting workpapers.
| Status | Risk level | Implication |
|---|---|---|
| Full reconciliation with supporting evidence | Low | Valuation-ready. Due diligence proceeds quickly. |
| Records exist but are not normalised or verified | Moderate | Incomplete documentation. Buyer will reconstruct, usually less favourably. |
| Unclear or incomplete records | High | Unverifiable profit. Material discount or withdrawal of buyer interest. |
Practices that can produce an accountant-prepared, normalised EBITDA report attract more qualified buyers, achieve better outcomes and complete transactions more efficiently.
Buyer red flags
Buyers reject or discount practices that cannot substantiate financial claims, show declining profitability without explanation or have incomplete documentation. Common red flags include:
- High owner dependency without succession planning
- Undocumented or unsustainable service fee structures
- Declining or unstable EBITDA trends without clear justification
- Missing or delayed tax returns
- Staff wages that are excessive relative to billings
- Normalised EBITDA that has not been calculated or cannot be defended
These issues do not necessarily disqualify a practice from sale, but they reduce buyer confidence, extend due diligence timelines and lead to lower offers.
Preparation
GP owners planning to sell within three years should:
- Engage an accountant to prepare normalised EBITDA for the past two years with all legitimate add-backs and supporting documentation
- Ensure all tax returns are lodged and current
- Document GP service agreements showing fee structures and notice periods
- Track EBITDA trends to demonstrate stability or growth
- Review staff wages as a percentage of billings against published benchmarks
- Confirm the billing model and assess whether the practice is positioned to capture current and forthcoming Medicare incentive changes
- Identify documentation gaps before buyer discussions begin