Is a Doctor in a Medical Centre a Contractor or an Employee?

The answer isn’t always black and white. Whether a doctor is considered a contractor, or an employee depends on a number of factors, including how they work, how they’re paid, and who holds the decision-making power.

The Australian Taxation Office (ATO) and Fair Work Australia don't just look at the label used in agreements—they assess the nature of the relationship. So, if a doctor has control over their work and the business aspects of their role (such as invoicing, choosing patients, setting their hours), they’re more likely to be seen as a contractor. On the other hand, if the medical centre dictates when and how the doctor works, that could suggest an employment relationship.

The Grey Zone: Neither Contractor Nor Employee

In the real world of medical centres, doctors often find themselves in a grey zone that doesn’t fit neatly into either category. In many cases, they’re not employees or contractors in the traditional sense. Instead, they operate more like tenants or principals—essentially running their own practice while making use of shared resources through service or practice agreements.

How This Model Works in Practice

1. Doctors Run Their Own Business

Typically, doctors in these arrangements are independent practitioners who “rent” a space within the medical centre. They're not employed by the centre, nor are they formally “contracted” to provide services to the centre. Instead, they use the premises and facilities to operate their own medical practice.

2. Fee-Splitting Instead of a Salary

Rather than receiving a salary or submitting invoices, doctors usually enter into a fee-splitting arrangement with the centre. For example, the doctor might keep 70% of the patient billings, while the medical centre takes 30% to cover the cost of facilities, admin, receptionists, and support staff. This setup enables doctors to operate independently while still benefiting from a shared infrastructure.

3. Clinical Independence

A key feature of this model is the doctor’s autonomy in clinical matters. They decide how to treat patients, what hours to work, and how to manage their medical practice. The medical centre might have policies about logistics—like opening hours or room usage—but it doesn't control clinical decision-making.

4. Shared Resources, But No Hierarchy

While doctors might use staff like receptionists or nurses who are employed by the medical centre, the relationship isn’t hierarchical. The doctor isn’t their employer, and the staff don’t report to them directly. Instead, it’s a shared, collaborative working environment—coexisting, rather than a formal employer-employee dynamic.

Why This Structure Makes Sense

This model works well because doctors are, by law and profession, expected to operate independently. They are trusted to make clinical decisions and manage patient care without interference. So, fitting them into the strict “employee” or “contractor” boxes often misses the reality of how they work.

• They’re not employees because they’re not under the direct control of the centre.

• They’re not contractors in the conventional sense because they’re not providing services to the centre—they’re running their own show within it.

  
  

Legal Recognition of a Unique Model

This type of arrangement is increasingly recognised by courts and authorities like the ATO as a distinct business relationship. It’s particularly common among professionals—such as doctors, dentists, and some lawyers—who operate their own businesses within shared premises.

In short, the modern medical centre isn’t just an employer or a contractor hub—it’s a shared platform. And doctors, rather than being boxed into one role or the other, are more accurately described as independent practitioners leveraging that platform to deliver care.