RevenueSA Payroll Tax Audit Objection

The situation

Sophia, 44, is the business owner of a physiotherapy group practice in Adelaide with 6 engaged physiotherapists, all operating as ABN contractors. In March 2026, RevenueSA issues her a payroll tax assessment for AU$87,000 in back taxes over three years, plus AU$21,750 in penalty tax and AU$9,400 in interest, total AU$118,150. RevenueSA's position: the contractor physiotherapists are performing work under a "relevant contract" and their payments are taxable wages.

Sophia had two SA tax firms quote her: AU$6,500 for review and objection preparation. She emails RevenueSA and asks them to explain how to contest, they refer her to the Objections and Appeals information page, which explains the process but provides no guidance on how to build the substantive case.

(a) The 'results' vs. 'contract for services' analysis determines her case. SA's contractor provisions exclude contractors who: (i) work for multiple clients (not exclusively for Sophia's practice); (ii) provide their own equipment (treatment tables, specialised therapy equipment); (iii) set their own hours and patient schedules; (iv) bear the risk of defective work. If her physiotherapists maintain their own patient lists, bring their own equipment, see patients outside the practice, and carry their own professional indemnity insurance, the contractor arrangement may survive the 'results' test.

(b) The medical practice payroll tax issue has active SA Revenue Ruling guidance. RevenueSA has issued guidance on contractor provisions and the medical/healthcare sector. Sophia's objection should engage with this guidance specifically and demonstrate how her practice's facts are distinguishable from the paradigm audit case.

Who receives this

South Australian medical practices, allied health groups, professional service businesses, and construction subcontractors receiving RevenueSA payroll tax assessments for contractor reclassification or grouping with related entities. SA has ~225,000 registered businesses and a significant healthcare/professional services sector concentrated in greater Adelaide.

Why the agency will not advise you

RevenueSA cannot advise audit respondents on how to contest its own assessments. The RevenueSA Objections and Appeals page describes the procedure but provides no substantive guidance. SA payroll tax specialists (McEwin Legal, tax firms) charge AU$3,000–$8,000. The Payroll Tax Act 2009 (SA) contractor provisions are published statute; the objection structure follows a well-defined legal framework.

Key facts, with sources

• RevenueSA administers payroll tax under the Payroll Tax Act 2009 (SA). The payroll tax threshold for South Australia in 2024-25 is $600,000 per year. If a business exceeds the threshold and does not remit payroll tax, or if an audit finds underdeclared wages (including contractor payments reclassified as wages), RevenueSA issues an assessment for back taxes plus penalty tax (up to 75% for serious tax avoidance) and interest. A business that disagrees with a RevenueSA assessment must lodge a formal objection within 60 days under the Taxation Administration Act 1996 (SA). If the objection is unsuccessful, the business may appeal to the South Australian Civil and Administrative Tribunal (SACAT) within 60 days of the objection decision, or to the Supreme Court for questions of law. Source: Objections and Appeals — RevenueSA · Audit and Compliance — RevenueSA
• The medical professional contractor issue is the most widespread payroll tax audit trigger across Australian states in 2024-2026. State revenue offices, including RevenueSA, are actively auditing medical practices and healthcare businesses that engage practitioners (GPs, specialists, allied health) as contractors. The states' position is that under the 'results' test in the payroll tax legislation, many arrangements where medical practices supply patients, equipment, administrative support, and premises to practitioners constitute 'relevant contracts' making the contractor payments subject to payroll tax. This follows Thomas and Naaz Pty Ltd v Chief Commissioner of State Revenue [2021] (NSW), a decision applying similar contractor provisions, and the Queensland Revenue Office's active enforcement program. RevenueSA's contractor provisions (Payroll Tax Act 2009 (SA) s 9 and Schedule 2) mirror the national model payroll tax legislation adopted by all Australian states in 2007-2009. Source: Modernising Queensland's Occupational Health and Safety Regime — Canadian Labour and Employment Law · RevenueSA — Payroll Tax Information

When to bring in a professional

Self-serve responses fit routine cases: clear facts, amounts a business can absorb, and a deadline still ahead of you. Bring in a licensed professional when the amount at stake is large relative to their fee, the facts are genuinely disputed, criminal exposure is possible, or the deadline has already passed. A short paid consultation to sanity-check your plan is often worth it even when you handle the filing yourself.

All sources for this guide

1. Objections and Appeals — RevenueSA
2. Audit and Compliance — RevenueSA
3. Modernising Queensland's Occupational Health and Safety Regime — Canadian Labour and Employment Law
4. RevenueSA — Payroll Tax Information