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Common Payroll Mistakes

At GPSA, we despair at seeing practice time and dollars being spent on payroll errors. We are all about making your life easier! We love hearing from practice managers and supervisors wanting to do the right thing by both the practice and the registrar. Getting payroll correct is imperative to the employee/employer relationship as much as the sustainability of the practice. Payroll errors, particularly the ones in a registrar’s 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; it simply highlights the importance of getting your calculations correct from the outset and clearly setting out entitlements, rights and responsibilities in the employment agreement. An earnings calculator is embedded in the employment contract templates we have developed to help you double check pay against billings and base rates. These templates are available for you to download and customise here.

Common errors

We want to save you some angst by flagging the most common errors we receive calls about. Check these 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:

Practices paying a full-time base salary also paying an additional education release

STOP! You’re paying twice!

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

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! Full-time is 38 hours p/w

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! Is this a good business decision?

The practice is free to determine a percentage of billings over the minimum stated in the NTCER, however this is a business decision which in any other industry would be made based on an established benefit to the organisation not for the purpose of motivating employee performance. 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 the same as a fellowed GP (say 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! Quality GP training relies on sustainable training practices!

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, which translates into 5 days personal (sick) leave and 10 days annual leave.

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 over 60% billings. They are very good billers

STOP! You may be unable to sustain this rate!

If you are paying your registrar above the minimum rates outlined in the NTCER, you need to be mindful of the issues you may be creating for yourself, the practice and quite importantly the registrar themself in the long term. While you may pay vocationally-registered GPs 60+% of billings, most commonly this is done as a tenant arrangement, meaning you then don’t have to pay for:

→ Superannuation (10.5%, increasing to 11% in July 2023)
→ Payroll Tax – varies state by state (e.g. VIC = 4.85%)
→ Workers Compensation Insurance – varies by state and size of payroll (eg 0.5%)
→ Annual Leave (7.69%)
38hr/wk x 52 weeks = 1,976 hours annually, 38 x 4 (wks leave) = 152 hours leave annually, (152/1976) x 100 = 7.69%
→ Sick Leave (3.84%)
38hr/wk x 52 weeks = 1,976 hours annually, 38 x 2 (wks leave) = 76 hours leave annually, (76/1976) x 100 = 3.84%

If your registrar is getting 60+% of their billings and then your practice has to cover additional employment on-costs, it is unlikely you will have anything left to cover your practice costs.

Consider also the scenario should you later contract this same registrar once they’re fellowed. To meet the business’ responsibilities of achieving a profit, it’s unlikely you will be able to offer them more than 65% ongoing as a tenant GP. Since this is so close to what they have negotiated as their percentage while training, it is impossible to avoid disappointment when this percentage is no longer accompanied by the sick leave, annual leave, superannuation, workers compensation insurance, etc enjoyed as an employed registrar.

The NTCER sets out the minimum you need to pay your registrar. This is a base line from which you have the flexibility as a business to offer more, but only if feasible in terms of sustainability.

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