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Common Payroll Mistakes

Here at GPSA we are 100% aware of how precious and valuable your time is and we despair seeing practice time and dollars being spent on trying to correct payroll errors.

We are all about making your life easier!

We love hearing from practice managers and supervisors who ring us concerned that they are wanting to do the right thing by both the practice and the registrar in getting the payroll for their registrars correct. We encourage you to continue this practice. The practice queries we receive indicate practices are often over generous. This of course is a business decision that is entirely up to you.

It is however disconcerting to learn of stories where a practice was trying to do the right thing, but an unviable business is the result. Payroll errors particularly the ones in a registrars favour have the potential to turn a once positive relationship on its head. This is not to suggest GP registrars want to be overpaid or rort the system either. It simply highlights the importance of getting your calculations correct from the outset and setting out entitlements in the employment agreement very clearly in alignment with the NTCER.

We want to save you some angst, by flagging the most common errors

 

payroll we receive calls about. Check them against your own payroll and employment agreement practices and make sure you get off to a good start with your new registrar(s) this term.

 

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COMMON ERRORS

Practices paying a full-time base salary also paying an additional education release
STOP! You’re paying twice!

YOU ARE PAYING TWICE!

Under the NTCER GPT1/ PRRT1 and GPT2/ PRRT2 Registrars are required to be released from your practice for education with their Regional Training Organisation.

The registrar is required to be paid at the base rate for this time.

The common error that occurs here is that practices pay their registrar a full-time base salary and then also add the base salary for the education day.

This means the registrar ends up being paid twice for the same day. Once you have paid your registrar for the day/ hours they are on educational release, there is nothing more to pay.


My registrar works 32 hours but is paid full time – STOP!

 

If your registrar is working less than a 38-hour week – they are part time… a registrar is only entitled to be paid for their work hours (=in the practice and educational release where they would normally be rostered).

(32/38) x 100 = 84.21% or 0.8421 Full-time Equivalent

The NTCER clearly states full time is a 38-hour week.


I am paying my registrar a higher percentage to motivate them – STOP!

 

We recently received a call from a practice manager (PM) who found a new registrar to the practice in GPT2/PRRT 2 really wasn’t billing enough to cover their own salary. The PM felt that this was the result of a lower percentage payment.

When you unpack professional behaviours and expectations it is important to remember in the early terms of a GP registrar, it takes time to become efficient and proficient. That said reasonable billing targets can be set as your registrar gains confidence.

If a registrar is not motivated at 44.79% billings, increasing their billings percentage to 60% will not make them any more or less efficient/ proficient or motivated… if it does, you have a professional attitudes issue to address. Teaching your registrar how to bill appropriately/effectively is all part of their training – the hidden curriculum if you will.


My registrar used two weeks sick leave during their first six weeks. I paid them their base salary per the NTCER in advance but now they have terminated their contract early – STOP!

 

GP registrars are entitled to access leave in advance but not more than what would be accrued in any six month block. In this scenario the registrar was entitled to pro rata six months (5 days personal (sick) leave and 10 days annual leave) in advance only.

Leave in excess of these amounts is purely a business decision, but we would recommend additional leave being treated as leave without pay to manage the risk of overpayment should a registrar terminate their contract earlier than expected.

If the employment agreement is terminated early the employer is entitled to deduct overpayments from the registrar’s final payment.

All documentation should be provided in reconciliation of the final payment to ensure transparency. If in doubt, we encourage you to seek professional accountant assistance to finalise termination payments.


I am paying my registrar 60% (or more) billings. They are very good billers – STOP!

 

If you are paying your registrar above the NTCER negotiated rates you are creating issues for yourself, the practice and the registrar longer term. Yes you may pay vocational registered GPs in your practice 60+% of billings, but most commonly this is done as a contractor arrangement, meaning you then don’t have to pay for:

If you are paying your registrar 60+% and then your practice has to cover additional employment on-costs, your practice may not cover practice costs. Consider also that should you later contract your registrar post vocational registration and you offer them say 65% if they have been earning close to this amount and then you remove, sick leave, annual leave, super, workers compensation insurance, etc. the newly fellowed GP’s total package may see them earn less post fellowship than as a registrar.

Paying your registrar in line with the NTCER is not about being mean… It’s being realistic about your business costs.

*These percentages are demonstrative only and should not be applied to the calculation of your registrar’s payroll.


My registrar negotiated a higher percentage… they still need to be able to live – STOP!

 

All sorts of tactics come into play when registrars are negotiating contracts and percentages. Many RTOs and GPRA provide education and resources to registrars on how to negotiate their conditions. Interestingly the same is not true for practice principals or practice managers.

The reality is (for a GPT3 or 4/ PRRT3 or 4) a base salary of $95,295 + the mandated difference between base and billings of 44.79% is an appropriate salary for the stage of training. Many rural GP registrars, because of GPRIPS payments and other incentives can earn over $200,000 p.a. There are few examples across industries where earning potential is uncapped and there is a reasonable salary safety net such as the NTCER built in.

The point we make here is not made to undervalue a GP registrar’s contribution or worth, but to harden you to ‘claims of woe’ during the negotiation. Your registrar may be wishing to work part time or may be a single income family… the truth is none of those personal choices or circumstances should influence business decisions around the setting of percentages. Just as your registrar will not likely seek your input into where their next holiday should take place… we all make work and life choices.