Dental Practice Payroll: Award Rates, Associate Dentists and the Questions Every Practice Owner Asks

Why Dental Payroll Is More Complex Than It Looks

Dental practices typically employ a mix of staff: dental assistants, dental hygienists or therapists, reception and administrative staff, and sometimes a practice manager. In addition, many practices engage associate dentists who operate under commission or fee-split arrangements. Each of these relationships carries different legal obligations, different award entitlements, and different payroll tax and superannuation implications.

The payroll complexity is compounded by the fact that the Health Professionals and Support Services Award has multiple classification levels, its own provisions for annualised wage arrangements, and specific penalty and allowance provisions that differ from more familiar awards like the Clerks Award. Practice owners who process payroll themselves, or who delegate it to a receptionist without specialist knowledge, run a real risk of underpayment that may not surface for years.

True Tally handles dental practice payroll for practices across Victoria. Part of our service is keeping the payroll correctly classified, ensuring STP Phase 2 data is categorised properly in each pay run, and flagging changes to Award rates each July when the National Minimum Wage Order takes effect.

Which Award Applies to Dental Practice Employees?

The Health Professionals and Support Services Award 2020 (HPSS Award) is the modern award that covers most dental practice employees in Australia, including:

• Dental assistants (Chair-side and sterilisation assistants)
• Dental hygienists
• Dental therapists
• Dental prosthetists
• Oral health therapists
• Practice managers where the role includes clinical coordination

Receptionist and administrative staff may be covered by the HPSS Award if their work is primarily in support of health professional services, or by the Clerks Private Sector Award 2020 if the dental practice is classified primarily as a business rather than a health services provider. In practice, most dental reception staff are covered by the HPSS Award. A registered employer organisation or employment lawyer can confirm which award applies to a specific role.

The Fair Work Ombudsman's Award Finder is the primary tool for confirming which award and classification applies to each employee in your practice.

Dental Staff Award Classifications and Minimum Rates

The HPSS Award uses a level-based classification system. Dental staff are classified by qualifications, experience and the complexity of their work. The following table shows the typical classification levels for dental practice roles. Minimum weekly rates change each July in line with the National Minimum Wage Order and should be confirmed against the current Award schedule before each pay cycle review.

These figures are indicative only and exclude casual loading (25% additional for casual employees), shift penalties, overtime rates and allowances. Confirm current rates using the Fair Work Pay and Conditions Tool before updating your payroll.

The Associate Dentist: Contractor or Employee?

The most common and highest-risk payroll question in dental practices is the status of associate dentists. Most Victorian practices structure their associate relationships as contractor arrangements, typically with a fee-split or percentage-of-billings agreement. But the contractor label does not automatically determine the legal position.

Following the High Court's 2022 decisions in CFMMEU v Personnel Contracting and ZG Operations v Jamsek, the primary focus in determining employment status is the written terms of the contract. However, the ATO and Fair Work Ombudsman both also consider the practical reality of how the relationship operates. For dental associates, the key factors are:

• Whether the associate uses their own equipment or pays an equipment levy to the practice
• Whether the associate sets their own appointment times and can decline appointments
• Whether the associate bills under their own provider number
• Whether the associate is free to work at other practices simultaneously
• Whether the associate bears the risk of bad debts or unpaid patient accounts
• Whether the associate provides services personally or can subcontract

Superannuation on Associate Dentist Income

Even where an associate dentist is genuinely engaged as a contractor, superannuation guarantee (SG) obligations may still apply. Under section 12(3) of the Superannuation Guarantee (Administration) Act 1992, SG must be paid to a person who is engaged under a contract that is wholly or principally for their personal labour and skill, even if they have an ABN.

An associate dentist who provides their dental services personally under a fee-split arrangement meets this test in most cases. The obligation is on the dental practice to pay SG on the ordinary time earnings (OTE) component of payments made to the associate. If SG has not been paid and the ATO later determines it was required, the liability falls on the practice in the form of the Superannuation Guarantee Charge (SGC), which includes the unpaid SG, an administration component, and interest at 10% per annum.

This is one of the most commonly mistreated payroll obligations in the dental industry. Practices that have not sought specific advice on SG obligations for their associate arrangements should do so as a priority.

STP Phase 2 Requirements for Dental Practices

Single Touch Payroll Phase 2 (STP2) requires employers to report disaggregated payroll data to the ATO in each pay run. For dental practices, the key STP2 requirements are:

• Gross income disaggregation: Base salary, bonuses, commissions, allowances and overtime must be reported as separate income types, not as a single gross figure
• Allowances: Uniform allowances, tool allowances and overtime meal allowances under the HPSS Award must be coded to the correct STP2 allowance type (not bundled into gross salary)
• Leave loading: Annual leave loading must be reported separately as a leave loading income type
• Salary sacrifice: Any pre-tax contributions (superannuation salary sacrifice, novated leases) must be reported separately and reduce the gross amounts reported
• Child support: If any employee has a child support garnishee, the withheld amount must be separately reported

Most payroll software including Xero Payroll has been updated to support STP2 reporting, but the software only produces correct STP2 data if the payroll is set up and coded correctly. A practice that has migrated to STP2 without reviewing its pay item classifications may be lodging incorrect reports to the ATO each pay run.

Allowances Under the HPSS Award for Dental Staff

The HPSS Award includes specific allowances that must be paid to eligible employees and reported separately under STP2. The most relevant for dental practices include:

• Uniform allowance: Where the employer requires employees to wear a specific uniform and does not supply or launder it, an allowance is payable
• On-call allowance: Where staff are required to be on-call outside of ordinary hours
• First aid allowance: Where an employee holds a current first aid qualification and is required to use it
• Overtime meal allowance: Where overtime extends beyond a specific number of hours and no meal is provided
• Shift penalties: For work performed on Saturday (typically 150% to 175%), Sunday (175% to 200%), or public holidays (225%), depending on the employment type and hours

Many dental practices that operate Monday to Saturday have Saturday penalty rates applying to at least some of their staff, and these must be calculated and paid correctly as part of each pay run.

Annual Wage Arrangements and the Reconciliation Trap

Some dental practices pay their staff a flat annual salary with the intention that it covers all Award entitlements including allowances, overtime and penalties. This is known as an annualised wage arrangement and is permitted under the HPSS Award, subject to conditions set out in the Award's annualised wage Schedule.

The key compliance requirement is an annual reconciliation: each year, the practice must compare what the employee was actually paid against what they would have received had they been paid strictly in accordance with the Award. If the Award-based calculation exceeds what was paid, the shortfall must be made up within the same pay period. Practices that do not complete this reconciliation are exposed to underpayment liability regardless of whether they believed the salary was generous.

This reconciliation is best done by the bookkeeper as part of the financial year close process, not left to the owner or practice manager to handle informally.

Watch: Dental Practice Payroll Explained for Victorian Practices

Frequently Asked Questions

Which award applies to dental assistants in Victoria?

Dental assistants are covered by the Health Professionals and Support Services Award 2020 (HPSS Award). Entry-level dental assistants are classified at Level 2, rising to Level 3 or 4 with qualifications such as a Certificate III or IV in Dental Assisting. The Award sets minimum rates that are updated each July in line with the National Minimum Wage Order.

Is an associate dentist a contractor or employee?

The answer depends on the terms of the engagement and how the relationship operates in practice. Most Victorian associate dentists are engaged as contractors under percentage-of-billings agreements, but this classification must be tested against the contractor vs employee criteria set out by the ATO, Fair Work, and the High Court's 2022 rulings. Seek specific advice before assuming contractor status is established.

Do I need to pay super to an associate dentist contractor?

In many cases, yes. Under the extended SG provisions, superannuation guarantee applies to contractors engaged wholly or principally for their personal labour. An associate dentist performing clinical work personally typically meets this test. The obligation is on the dental practice to pay SG on the ordinary time earnings component of payments made to the associate.

What are the Saturday penalty rates under the HPSS Award?

Under the HPSS Award, work performed on Saturday typically attracts a penalty rate of 150% for full-time and part-time employees within their ordinary hours. Casual employees receive their base casual rate plus the applicable Saturday loading. Check the current Award schedule via Fair Work for exact rates, as these are updated with the National Minimum Wage Order.