Starting a medical practice in Australia: a step-by-step guide for GPs

Disclaimer: This information is general in nature and doesn't take into account your personal financial circumstances. For advice tailored to your situation, please consult a registered accountant or financial adviser.

Going out on your own is harder than most GPs anticipate — yet also more rewarding.

Australia has around 7,100 accredited general practices, and the number keeps growing. Thousands of GPs have made the leap without a business background — but the process is layered, the order matters, and you can easily come unstuck.

Here's what to do and when to do it.

Step 1: Choose a business model

The first decision is the most fundamental: solo, multi-doctor or multi-disciplinary?

The numbers favour going bigger, says Russell Lee, clinician and founder of Health Business Network, who grew his own Sydney practice and has since helped establish 26 health precincts across Australia and now works as a consultant helping GPs to set up their own practices.

"A solo practice will cost 25–35% more to run than a multi-doctor practice, where you're sharing overheads. Two or three staff can look after three doctors as easily as one — and a fuller schedule makes a treatment room viable too."

Meanwhile a multi-disciplinary model — bringing physios, nutritionists and allied health under one roof — means less referring out and a higher level of inhouse billing.

Spend a few months fine tuning your vision, advises Lee.

"Ask yourself what you want your practice to look like in 25 years' time. Then put the foundations in place now."

Step 2: Select a business structure

General practice ownership can be structured as a sole trader, company or trust, explains Matthew FitzGerald, medical accountant at Liston Newton Advisory.

As a sole trader, patient income must be earned in your personal name; you can't route it through a company to reduce tax, he says. And with most GPs in the 47% bracket (including the Medicare levy of 2%), this makes sole trading a poor choice for practice owners, he adds.

FitzGerald suggests it's better to operate the clinic as a company or unit trust, charging yourself — and other GPs — a service fee of 30–40% for reception, nursing and overheads. This way, your personal income is reduced while the clinic pays tax at around 25%.

For owners who also buy their premises, the structure might extend further — a separate entity owning the property, the company running the clinic and you as sole trader, says FitzGerald.

"This sounds overwhelming, but longer term it means if you step back, the business can still operate and earn income."

If you ever want to sell, choose a company over a trust, which are harder to transfer, he says. 

And register for an ABN, business banking, GST and PAYG from day one.

Step 3: Decide how to charge

The decision to bulk bill, use mixed billing or charge privately shapes your revenue, patient load and the long-term viability of your GP practice setup.

A bulk billing practice ties revenue entirely to the Medicare Benefits Schedule (MBS) rebate — meaning volume becomes the only lever. A mixed billing GP practice creates more financial headroom and more time per patient.

Dr Rodney Aziz grew his practice, Family Doctor, from one clinic to 110 on a mixed-billing model — bulk billing those with genuine social need while remaining profitable.

"The economics of pure bulk billing have got harder," he says. "Your model has to be sustainable or you can't keep the doors open. Some practices have remained mixed or private billing for that reason."

That said, the policy landscape is shifting. The new Bulk Billing Practice Incentive Program now pays an extra 12.5% loading on every MBS dollar for practices that bulk bill all patients. A separate Bulk Billing Incentive (BBI) — the base incentive paid per bulk-billed service — scales with remoteness using the Modified Monash Model, so a rural or remote GP earns a bigger BBI on each bulk-billed visit before the 12.5% BBPIP loading is applied on top.

Step 4: Budget GP practice costs

Starting a medical practice in Australia varies widely, depending on scale and location. The main drivers are fit-out, staffing, equipment, compliance and marketing.

Most Australian practices run on margins of just 5–10%, says Aziz, so the numbers matter. He suggests calculating a basic model including weekly operating costs, number of patients needed to break even and timeline to cash-flow positive.

The biggest trap is the cash-flow gap, he adds. 

"You're paying rent, wages, software and insurance from day one, but Medicare money and patient volume take months to build. Have a buffer that's bigger than you think you need. Most practices don't fail because the idea was bad — they just run out of cash before they ramp up."

Step 5: Find the right premises

Location is more complex than it looks. Parking, accessibility, visibility, zoning and size all matter — but so does your eligibility to practice there.

International Medical Graduates (IMGs) within their 10-year period must check whether the area is a Distribution Priority Area (DPA) under Section 19AB. Their ability to bill Medicare is tied to location in a way it isn't for other GPs.

"I've seen people sign or nearly sign before checking, and it's heartbreaking. Get formal confirmation of your eligibility for that exact location in writing before you commit a dollar," says Aziz.

For everyone else, zoning and lease terms are the key risks. Confirm medical use approval before signing, and engage a commercial agent with medical experience plus a lawyer who specialises in medical leases.

Step 6: Get GP accreditation

General practice accreditation is your clinic's formal proof it meets national safety and care standards. 

You don't need it to open, but you do need it to access the Practice Incentives Program (PIP), MyMedicare incentives and Workforce Incentive Program payments — which together represent significant quarterly income.

Accreditation is assessed against the RACGP Standards (currently in its fifth edition with the sixth due in 2026) by one of two approved agencies: AGPAL or QIP.

"It's important to go through the services and support each one provides so they can make an educated decision," says Lee.

Step 7: Register for Medicare

Before you see a single patient, you need AHPRA registration, a Medicare provider number and a Practice Minor ID — and each takes longer than you'd expect.

Your Medicare provider number is tied to your specific address, so lock in your location first. Applications go through PRODA and can take a few weeks.

"Build in lead times," says Aziz. "The number of people who are ready to see patients but can't bill yet because a number hasn't landed is higher than you'd think."

Your Practice Minor ID allows your clinic to process Medicare claims online, is issued by your software provider and takes around 10 business days to link. 

Set up MyMedicare early too — patients formally registering with your clinic creates more predictable income from the start.

Step 8: Know GP practice staffing obligations

Hiring well is one thing — hiring correctly is another. Most clinic staff fall under the Health Professionals and Support Services Award, which sets minimum pay rates, overtime and leave entitlements. These update regularly, and penalties for getting it wrong aren't trivial.

A common mistake is classifying everyone as casual, says Lee. If a staff member works consistent shifts over time, Fair Work will likely view them as permanent — regardless of the contract.

From 1 July 2026, superannuation must be paid each pay run rather than quarterly under new PayDay Super obligations.

"For some practices this means tens of thousands of dollars going out the door each pay cycle. Your cash flow needs to allow for this," says FitzGerald.

Step 9: Protect patient data

Every GP practice, regardless of size, must comply with the Privacy Act 1988, which covers how patient information is collected, stored, used and shared.

The health sector consistently leads Australia's data breach statistics, accounting for 18% of all reported breaches in the first half of 2025 — through criminal attacks and everyday human error alike.

"We often hear about hackers locking the practice then blackmailing them," says Lee. 

Choose your practice management software early, says Aziz — Best Practice and MedicalDirector are the most widely used.

"Everything hangs off it — your workflows, billing, reporting and data. Migrating later is painful. Set it up properly from the start with someone who knows it."

And build in the basics from the outset: strong access controls, multi-factor authentication, staff training, tested backups and a breach response plan. Under the Notifiable Data Breaches scheme, serious breaches must be reported to both patients and the OAIC.

In healthcare, a breach is both a legal and a reputational event, says Aziz.

"Get consent and information-handling right from the first patient — collection, use, disclosure and My Health Record participation. Treat patient data as the most sensitive thing you hold."

Step 10: Build a medical practice that works for your life

Opening a practice is one of the hardest things you'll do professionally, but paying for the right advisors saves you in multiples later.

"The first year is more business than medicine," says Aziz. "The GPs who burn out are usually the ones still doing reception, accounts and clinical work at 9pm."

Outsource ruthlessly, adds Lee. 

"A bookkeeper and IT person may cost less than $100 an hour. You cost $300–$500. Every hour you spend on tasks someone else could do is an hour you're not seeing patients — or resting."

While setting up your own medical practice can be challenging, the other side is genuinely worth it, says Aziz.

"You build the practice the way you believe medicine should be practised. You set the culture, the standard, the kind of care. You build long-term relationships with patients and become part of a community — which is why most of us got into this in the first place."

Done well, you're building an asset, not just earning a wage, he adds.

"Building something that's yours and that looks after people properly is deeply satisfying in a way that a job rarely is."

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