This question keeps arriving in the same form. An accountant, practice manager or recruiter asks whether a registrar's billing percentage can be paid to a company structure or must go to the doctor's personal TFN.
The answer is not ambiguous.
The regulatory position
All GP registrars must be engaged as employees. This applies across training pathways, including AGPT and Fellowship Support Program placements. It is a condition of the training program itself, not a matter of preference or commercial negotiation.
The National Terms and Conditions for the Employment of Registrars (NTCER), jointly maintained by General Practice Registrars Australia (GPRA) and General Practice Supervision Australia (GPSA), sets the minimum employment terms for all GP registrars. Version 2024-01, valid from Semester 1 2025, is very clear: the NTCER does not provide for any relationship between a registrar and a practice other than employment. Not a contractor. Not a partner. Not agent (GPRA, 2024).
GPRA's FAQ is direct: AGPT registrars must be employees. Registrars hired as contractors must transition to employment by Semester 1, 2026 (GPRA, n.d.).
The hard deadline
Registrars hired as contractors must transition to employment by Semester 1, 2026. This is a condition of training program participation, not a matter of commercial preference. A compliant arrangement requires salary, statutory superannuation (currently 12%), leave entitlements, and, if relevant, billing-based incentives. Service agreements, ABN invoicing, and company payments do not comply.
This applies to all training pathways. RVTS registrars also need employment contracts outlining their terms.
Why the employment classification holds
Classification is not arbitrary; it reflects the working relationship.
A GP registrar requires supervision and cannot practise independently. They are part of a structured training program with set learning objectives, assessment milestones, and oversight. The practice determines where, when, and how the registrar works. These are key characteristics of employment under any standard test.
Since 26 August 2024, section 15AA of the Fair Work Act 2009 requires assessing employment by the real substance and nature of the relationship, not contract labels (Fair Work Legislation Amendment (Closing Loopholes No. 2) Act 2024). This overturned the High Court's prior focus on contract terms.
Under the current test, a supervised registrar who cannot delegate work, follows practice systems and procedures, and works set hours at a set location will be classified as an employee regardless of the contract.
The extended definition of 'employee' in section 12(3) of the Superannuation Guarantee (Administration) Act 1992 adds a further layer. A person who works under a contract 'wholly or principally for the labour of the person' is deemed an employee for superannuation purposes, even if no common law employment relationship exists. A registrar billing consultations under supervision fits that definition precisely.
What many practices are doing
Even though the regulatory position is clear, the industry seems not to be.
Some practices engage registrars as contractors, route payments through company structures, or use service agreements that mimic employment but avoid the label.
This is not a grey area in the law. There is a gap between legal requirements and what some practices do, often following accountants' or recruiters' advice without reviewing training program requirements or the NTCER.
The usual response when this is raised: 'But other practices are doing it.'
That's not a compliance argument; it's an indicator of current enforcement.
Exposure risk
Engaging a registrar as a contractor when the relationship is, in substance, employment exposes the parties to multiple risks.
Under sections 357 to 359 of the Fair Work Act, misrepresenting an employment relationship as an independent contracting arrangement is a civil offence. The penalty is up to 60 penalty units per contravention. At the current penalty unit value of $330 (as at November 2024 under the Crimes Act 1914), that is $19,800 per contravention for an individual and $99,000 for a body corporate. Each pay period during which the misrepresentation continues can constitute a separate contravention (Fair Work Ombudsman, n.d.).
Since 27 February 2024, the defence to sham contracting has been narrowed. Previously, an employer could argue that it did not know the worker was an employee and was not reckless in holding that view. The amended test requires the employer to show they 'reasonably believed' the arrangement was genuine contracting. For a registrar on a supervised training program covered by a sector-wide employment agreement, that belief would be difficult to sustain.
The Closing Loopholes amendments also introduced criminal penalties for intentional wage theft from 1 January 2025, carrying a maximum term of 10 years' imprisonment and fines of up to $7.825 million (Department of Employment and Workplace Relations, 2024).
Penalty exposure at a glance
Sham contracting: up to $19,800 per contravention for an individual and $99,000 for a body corporate, with each pay period a separate contravention. Intentional wage theft (from 1 January 2025): up to 10 years' imprisonment and $7.825 million in fines. ATO recovery of superannuation guarantee charges plus interest and Part 7 penalty. Backpay claims for annual leave, personal leave and long service leave. And training-placement risk: GPRA and the colleges can intervene where training conditions are not met.
Beyond Fair Work, the ATO can pursue unpaid superannuation guarantee charges, including the nominal interest component and the Part 7 penalty. The practice may also face backpay claims for leave entitlements that should have accrued under an employment arrangement: annual leave, personal leave and long service leave.
Training compliance is a separate risk. If a registrar's employment arrangement does not comply with the NTCER, the training placement itself may be at risk. GPRA and the colleges have the capacity to intervene where training conditions are not met.
The commercial calculation
General practice has operated with a range of engagement models for decades. Many qualified GPs work legitimately as independent contractors, operating their own businesses, bearing their own risk, and negotiating service arrangements with practices. That model works where the GP is genuinely independent.
A registrar is not in that position. They are in a training program and supervised. So they are not permitted to operate independently. The commercial convenience of a contractor arrangement does not change the legal character of the relationship.
The environment has shifted, and the Closing Loopholes legislation has materially changed the risk profile. The sham contracting defence is harder. The penalties are higher. The ATO's Taxation Ruling TR 2023/4 has clarified the definition of an employee for superannuation purposes. And GPRA has set a hard deadline for contractor-to-employee transition by Semester 1, 2026.
Practices that continue to engage registrars as contractors are betting that enforcement will not reach them. That may hold for now, but it won't indefinitely.