Over the past year and a half we’ve been going deep on the topic and challenge of GP practice services fees, having now worked with hundreds of practices to improve the process I was keen to share some of what we’ve been seeing day to day.

If your practice operates on a service fee model, the rates in your practitioner agreements are some of the most important numbers in your business. Service fees fund your rooms, your practice team, the systems that run it. Importantly, we’ve been finding more and more that practitioner agreements often shape whether practitioners choose to join you, stay with you, and pick up the sessions that are hardest to fill. Despite the importance of these agreements, many practices still operate on a flat percentage model, treating a standard consult on a Tuesday morning the same as an aged care visit on a Saturday.

The best practices around Australia are findings ways to implement fairer, more flexible service fee rules and so we’ve put together this helpful guide working through the main rule types we see. We’ll cover basic percentages, varied rates by item type, thresholds, guarantees, location rules, day and date rules, and time-of-day rules. For each, we’ll look at what it does and how it can make an agreement fairer for both the practice and the practitioner, before turning to what it takes to administer these rules every fee run.

What is a service fee?

Let’s start with the foundations. A service fee is the amount a practitioner pays the practice for use of the rooms, equipment, staff support and administration services the practice provides, most commonly calculated as a percentage of the practitioner’s billings. In a typical tenant doctor arrangement, the practitioner runs their own business, bills patients in their own right, and pays the practice a service fee for the facilities and support that make that work possible.

How an agreement is worded, structured and administered can have legal and tax consequences, including for payroll tax, so any changes should be made with advice from your accountant and lawyer. What follows is general information about how practices commonly structure the fee rules themselves, not legal or tax advice.

Percentage-based service fee, general consults rule

The basic percentage is the foundation every other rule builds on: the practitioner pays the practice a set percentage of everything they bill. It is easy to explain, easy to calculate and easy for a practitioner to check, and for some practices a single well-chosen rate is the right model.

Its weakness is that it treats all billings as if they cost the practice the same to support, and they don’t. That is the gap the rest of the rule types in this guide exist to close.

Varying the percentage by item type

Many practices apply different percentages to different groups of billings. MBS consultation items, procedural items, DVA services paid under the Department of Veterans’ Affairs fee schedules, and custom items such as pre-employment medicals, reports and non-rebateable services can each carry their own rate.

Varying fees by service type makes sense when you consider cost and value. A procedure that uses the treatment room, consumables and nursing time places different demand on the practice than a report the practitioner writes at their own desk, and the service fee can reflect that. Item-level rates can also encourage the work a practice wants to grow, such as a lower rate on care planning items while a practitioner builds their chronic condition management cohort. The right percentage for one type of billing is not automatically the right percentage for another, and an agreement that recognises this is easier to defend as fair.

Thresholds

A threshold is a set billing or receipt amount that triggers a change in the service fee percentage. For example, practice might charge 35% on the first portion of a practitioner’s fortnightly billings and a reduced 30% above a set threshold, so the effective rate falls as the practitioner’s billings grow.

For the practice, the higher rate on the first tier helps cover the fixed costs of a room and support team that exist whether the practitioner bills or not. For the practitioner, the structure rewards productivity automatically, without renegotiating the agreement every year. Thresholds are also a genuine recruitment and retention tool: a practitioner utilising the MBS to correctly bill for the diverse range of service they provide generally sees the value in a tiered model that incentivises providing more involved services and better proactive patient care.

Guarantees

Guarantees are most commonly found when a practice operates under a practice flow of funds model, where the practice collects billings on behalf of the practitioner, and then disburses the billings less service fees.

When a new practitioner joins a practice, it can take time to establish their patient base and build consistent billings. A guarantee provides an agreed minimum amount for a defined period, often the first three or six months, to provide greater certainty during this transition. For the first three or six months, if the practitioner’s share of billings falls short of the guaranteed amount, the practice tops it up; once their book is established, the standard percentage applies.

For the practice, a guarantee is a bounded, time-limited cost. For the practitioner, it can be the difference between joining and not, which is why guarantees have become one of the most common features of offers to new recruits in a tight GP workforce market.

Location-based rules

For practices with more than one site, or with practitioners who work outside the main rooms, a single percentage across every location rarely reflects reality. Location-based rules apply different rates depending on where the service was provided: one rate at the main site, another at a satellite clinic, and another for off-site work.

Residential aged care is the clearest example. When a practitioner provides services at a residential aged care facility, they are travelling on their own time and consulting in the facility’s rooms, as opposed to the clinic’s. The practice still does real work behind the visit, including the scheduling, billing and follow-up, but less than it does for a consult in your treatment rooms. A lower service fee rate on billings raised at aged care facilities recognises that, and it makes this work more attractive to practitioners at a time when aged care access to GPs is under real pressure.

Day and date rules

Some sessions are harder to roster than others, and the service fee can do quiet work here to ensure your practice has the coverage it needs. Day-of-week rules apply a lower rate on particular days where practitioner availability may be lower, most commonly Saturdays or Sundays. Date rules do the same for specific dates or periods: public holidays, or the days between Christmas and New Year when patient demand stays high and practitioner availability drops.

A reduced fee rate on the weekend session shows a practitioner that the practice values making themselves available, to help the practice maintain coverage and offers patients greater flexibility when booking appointments.

Time-of-day rules

Time-of-day rules vary service fee rates depending on when the service was provided, and the classic use is after hours consults. Consider a practice that charges a 35% service fee during standard hours and 25% after 6pm. The after-hours MBS items already carry a higher benefit than their daytime equivalents: the standard Level B attendance (item 23) carries a schedule fee of $45.05 as at 1 July 2026, while its after-hours equivalent (item 5020) carries $58.65.

If the practice were to enter an agreement with a 25% service fee rate for billings after 6pm and before 8am the following day. You see a circumstance where the practice still charges a service fee amount very similar to the regular rate, while heavily incentivising practitioners to provide after hours coverage.

In this scenario the practitioner takes home an additional $147, but the practice wins too. A 25% share of evening billings that would otherwise not exist is better than 30% of nothing, the practice’s fixed costs are spread across more hours, and patients get access outside standard working hours. This is what a well-structured rule looks like: both parties are better off than under the flat rate.

Putting the rules into practice every fee run

Everyone’s favourite part. Practice admin!

Adding a larger variety of rules is certainly not a new concept for general practice, the main reason agreements incorporating many rules isn’t the norm largely comes down to the effort in enforcing the rules during every fee run. For a practice generating billing reports manually out of their practice management system and then manually applying rules for different item groups, locations, times and days would result in dozens of hours in additional admin, all with a real wage cost attached. Done manually in spreadsheets, that is hours of work each period and a real risk of errors, and nothing erodes a practitioner’s trust in their agreement faster than a statement they can’t reconcile. We’ve seen practices avoid fairer structures not because they disagreed with them, but because they couldn’t face administering them.

We’ve spent years building Cubiko Calculate to enable practices to utilise fairer rules. It’s a dedicated piece of software that handles the entire service fee run for you. You can configure all the rules you need one time, automatically capture billings and receipts from Best Practice and then let Calculate generate tax invoices, disbursement advice and even push everything across to Xero.

A fair agreement, in the end, is one where the structure matches the reality of the work: who bore the cost, who took the risk, and who covered the session nobody else put their hand up for. Start with the rule that would make the biggest difference to your practice, model the numbers with your practitioners in the open, and seek appropriate accounting and legal advice before you change the paperwork. If you’d like a hand making the calculations the easy part, that’s exactly what we’re here for.