Plenty of physio practices use contractors. Some are set up properly. A lot are not.

The risky ones usually have the same pattern: the physio has an ABN, sends an invoice, and the agreement says “contractor”, but everything else looks like employment.

That is where practice owners get caught.

The ATO does not care much about the label. It looks at the rights in the arrangement. Can you roster them? Can they send someone else? Who carries the risk? Are they really running their own business, or are they working inside yours?

If you just want to check your current setup, take the Contractor Risk Assessment. It will show where your associate arrangements are exposed.

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The quick test

Your setup is higher risk if:

• you control their days, hours, or roster
• they have to do the work personally
• they cannot send another qualified physio in their place
• they are paid hourly or daily
• you provide the room, equipment, systems, and reception support for free
• they are listed on your website like staff
• they use your branding, email, uniform, or provider number
• your practice carries the insurance and clinical risk
• you are not paying super because “they are contractors”

One or two of these may be manageable. Stack a few together and the position gets hard to defend.

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Start with the contract

The contract matters more than it used to.

Since the 2022 High Court decisions, the ATO puts a lot of weight on the legal rights in the agreement. So if the contract gives you the right to roster the physio, direct their work, require personal service, and present them as part of the clinic, you have a problem before anyone looks at what happens day to day.

This is why older agreements worry me. Many were written for the old test. They often say contractor on page one, then read like employment for the next ten pages.

If your agreement has not been reviewed since late 2022, start there.

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Where physio practices usually get exposed

The ATO asks whether the worker is serving in your business or providing services to your business. In a physio clinic, that comes down to a few very practical things.

Control

If you set the physio’s days, hours, location, and roster, that points toward employment.

Clinics need diaries. That is not the issue. The issue is whether the physio actually controls when they work, or whether they are rostered like staff.

Delegation

A genuine contractor should usually be able to delegate or subcontract the work. In plain English: can they send another qualified physio in their place?

If the answer is no, the arrangement looks more like you are paying that individual for their personal labour.

Payment

Hourly and daily rates are risky. They look like payment for time.

Percentage of billings is usually better, but it will not save a bad arrangement on its own.

Rooms and equipment

If you provide the room, plinth, equipment, booking system, reception support, and consumables for free, the arrangement starts to look like employment.

A cleaner contractor model usually has a commercial basis for using the practice’s facilities, such as a documented room or facility fee.

Insurance and risk

Who wears the cost if something goes wrong?

If your practice insurance covers the associate and your business carries the risk, that points toward employment. A stronger contractor model has the associate carrying their own professional indemnity insurance and responsibility for their own work.

Branding and patient perception

If the associate is on your website, uses your email, wears your uniform, and is introduced to patients as part of your team, they look like part of your business.

That is hard to square with the idea that they are separate.

Provider numbers

Provider numbers are not the whole test. They still matter.

If claims are processed under the practice’s provider number, it supports the idea that the service is being delivered through the practice, not by a separate provider.

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Super is the bit people miss

Even if a physio is a contractor for general tax purposes, you may still need to pay super if the contract is mainly for their labour.

Most associate arrangements look exactly like that. A physio turns up and personally treats patients using their own clinical skill.

The ATO says super can apply even if the contractor has an ABN. Paying an extra amount to the contractor instead of paying super into their fund does not count.

The current super guarantee rate is 12%. If you get this wrong across several associates and several years, the number gets ugly.

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The usual excuses do not help

These lines come up all the time:

• “They have an ABN.”
• “They invoice us.”
• “The contract says contractor.”
• “Everyone in the industry does it.”
• “They wanted to be a contractor.”

None of them settles the issue. The ATO looks at the arrangement, not the story around it.

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What to check now

If you use physio associates on ABNs, check the basics:

• Does the contract allow real delegation?
• Who controls the roster?
• How are they paid?
• Do they pay for rooms or facilities?
• Do they hold their own insurance?
• Are they presented as staff or as a separate provider?
• Whose provider number is used?
• Are you paying super?
• Has the agreement been reviewed since the 2022 High Court decisions?

If several answers are weak, the arrangement needs work.

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Bottom line

A physio can be a genuine contractor. But the setup has to back that up.

If they work like staff, look like staff, cannot delegate, use your systems, and you are not paying super, do not ignore it.