Is chiropractic GST free in Australia?

Chiropractic is one of the health services the ATO lists as capable of being GST free, and the listing is one of three conditions rather than the whole test. The service also has to be performed by a recognised health professional in that listed service and be generally accepted in that profession as necessary for the appropriate treatment of the recipient of the supply. Preventative care and routine check-ups sit inside the ATO's description of appropriate treatment.

How many income accounts does a chiropractic practice need in Xero?

Nine covers a single site practice in the canonical allied health template: private patients, Medicare, the health fund benefit, WorkCover, CTP and TAC, reports, products, cancellations, and other income. Five clearing accounts sit beside them, one per settlement rail. A practice that also bills NDIS or corporate contracts adds a revenue account for each, because the recipient of the supply differs and so does the tax rate.

Why split the health fund benefit and the patient gap into two accounts?

Because two payers settle them on two clocks. The approved fund benefit reaches the practice account through HICAPS after the terminal settles the day, and the gap rides the card batch to the acquiring bank. Two revenue accounts and two clearing accounts let a practice see what its fund work is worth and spot a fund settlement that has not arrived, instead of reading it as a slow month.

Do braces, pillows and tape sold at the counter carry GST?

Generally yes. Goods are GST free only where they are a necessary part of the service, supplied at the same time and place, and either specific to that patient's condition or essential to that consultation, which is why the ATO treats items the patient takes home as taxable. A medical aid or appliance listed in schedule 3, specifically designed for people with an illness or disability and not widely used by people without one, is the exception, and which items qualify is a list the practice builds with its BAS agent.

Templates

Chiropractic chart of accounts for Xero

A chiropractic practice starts with nine revenue accounts and five clearing accounts. The health fund benefit and the patient gap sit on separate revenue accounts because two payers settle them on two clocks. Treatment is GST free where it meets the ATO's three conditions for a listed health service; reports and the retail shelf are taxable, so they get accounts of their own from the first day.

Key facts

Where chiropractic sits for GST: On the ATO's list of health services that can be GST free, alongside osteopathy, so a consult is GST free where it meets the three conditions that list carries³
The three conditions: It is a listed health service, it is performed by a recognised health professional in that service, and it is generally accepted in that profession as necessary for the appropriate treatment of the recipient of the supply³
Size of the starting chart: Nine revenue accounts and five clearing accounts, taken from the eighteen revenue accounts and ten clearing accounts the allied health template carries¹⁰
Where a private consult posts: Account 400, clinical services private patients, at the GST Free Income tax rate¹⁰
Where a fund benefit posts: Account 403, clinical services private health fund benefit, at the GST Free Income tax rate, because the fund is the payer and the patient is still the recipient¹⁰
Where the fund settlement lands: Account 104, HICAPS clearing, at the BAS Excluded tax rate, until the bank line arrives and is matched out of it¹⁰
Goods the patient takes home: GST free only where they are a necessary part of the service, supplied at the same time and place, and either specific to that patient's condition or essential to that consultation⁵
Chiropractic on the MBS: Item 10964, a chiropractic health service under chronic condition management, at least 20 minutes, capped at five services a calendar year across the whole chronic condition management subgroup, schedule fee A$74.55 with an 85 percent benefit of A$63.40⁸
What HICAPS charges on a fund claim: No fee to process a health fund or Medicare Easyclaim claim, with card processing billed monthly to a nominated account, so the fund benefit arrives gross¹

What a chiropractic practice actually bills

A chiropractic chart is narrower than a general allied health chart, and narrow in a particular way. Most of the money is the patient's own, most of the rest is a health fund benefit claimed at the desk, and the two arrive from different payers on different days. Around that sit a compensable claim or two, a few Medicare items on referral, and a shelf of pillows, braces and tape.

That mix decides the chart. A practice that puts all of it in one sales account cannot say what its fund work is worth, cannot see a fund settlement that never arrived, and has one tax rate sitting over lines that do not share one. An Australian bookkeeping practice writing about allied health Xero setups makes the same point: income accounts split by payer, with tracking categories left for practitioner and location.

The starting chart, account by account

These are the revenue accounts the canonical allied health template carries that a chiropractic practice uses, with the Xero tax rate the template sets on each. The codes are the template's own numbering, not Xero's default chart, and they are what the product applies when a practice starts here.

The revenue accounts a chiropractic practice starts with¹⁰

Account	Xero tax rate	What lands there
400 Clinical services, private patients	GST Free Income	The patient's own money: the whole fee, or the gap where a fund pays part.
401 Clinical services, Medicare	GST Free Income	The Medicare benefit on a chronic condition management referral.
403 Clinical services, private health fund benefit	GST Free Income	The benefit the health fund approves at the terminal, settled through HICAPS.
407 Clinical services, WorkCover and workers compensation	GST Free Income	Treatment on an accepted workers compensation claim.
408 Clinical services, CTP and TAC	GST Free Income	Treatment on a CTP or transport accident claim.
420 Reports, assessments and medico-legal	GST on Income	A report or assessment a third party asked for.
422 Products and equipment sales	GST on Income	The retail shelf: pillows, braces, tape, anything taken home.
423 Cancellation and no-show fees	GST Free Income	Cancellation and no-show fees. The rate shown is the default for a cancelled consult.
460 Other income, room rental and admin fees	GST on Income	Room rental to an associate, admin fees, anything that is not treatment.

Three of the nine carry the taxable rate from the first day, which is the point of listing them before a practice needs them. A report account, a products account and an other income account that already exist are accounts nobody invents mid quarter, after the invoice is coded and the BAS lodged.

Why one visit lands on two revenue accounts

A patient with cover swipes the fund card at the desk, the fund approves a benefit in seconds, and the patient pays the difference. One invoice, two payments, two payers. The approved fund benefit reaches the practice account through HICAPS after the terminal settles the day. The gap joins the card batch and is paid by the acquiring bank.

Splitting those onto accounts 403 and 400 answers the practice's own question: how much of this month came from funds, and did the funds pay it. Merged into one line, a missing fund settlement reads as a slow month.

Plate 1The five rules a chiropractic invoice hits, drawn from the canonical allied health template.

The clearing accounts, and the rails that settle into them

Revenue is earned when the treatment happens. The money turns up later, in a lump, from a payer who does not tell the bank feed which invoices it covers. A clearing account per rail holds that gap, and its balance is the money approved but not yet delivered. Each is a bank type account at the BAS Excluded rate, because the tax consequence belongs to the revenue line and has already been taken.

The clearing accounts a chiropractic practice starts with¹⁰²

Clearing account	Xero tax rate	Who settles into it
100 Medicare clearing	BAS Excluded	Services Australia, on its own payment run
104 HICAPS clearing	BAS Excluded	HICAPS, after the terminal settles the day's claims
106 EFTPOS clearing	BAS Excluded	The acquiring bank, with the day's card takings
108 WorkCover clearing	BAS Excluded	WorkCover Queensland, by EFT once a claim owner authorises it
109 Insurer clearing (TAC, CTP, icare direct)	BAS Excluded	An insurer paying directly rather than through a claiming gateway

The HICAPS one is the account a chiropractic practice watches. The claim itself is free and card processing is billed monthly to a nominated account, so the fund settlement should arrive gross and reconcile against the day's approved benefits with no fee leg to back out first. The terminal prints the day's totals by provider, the listing that proves it. The mechanics are on the HICAPS page.

Where the GST line falls

Chiropractic is on the ATO's list of health services that can be GST free, and it is listed separately from osteopathy on the same list. Being on the list is one of three conditions, not the whole test. The service also has to be performed by a recognised health professional in that listed service, and it has to be generally accepted in that profession as necessary for the appropriate treatment of the recipient of the supply.

The ATO describes appropriate treatment as using professional skills to assess a patient's health, work out a course of action to preserve, restore or improve their wellbeing, and supply a treatment the profession generally accepts as appropriate. Preventative care and routine check-ups are inside that description, which answers the maintenance visit question a chiropractic practice asks more often than most.

A health fund paying part of the invoice does not move that line. The fund pays on the patient's behalf, so the patient is still the recipient. What is taxable is taxable for a reason of its own: the retail shelf, the report, and the income that is not treatment at all.

The retail shelf is a taxable line

Goods are GST free only where they are a necessary part of providing the GST free service and are supplied at the same time and place as it, and are either specific to treating that patient's condition or essential to treating them during that consultation. The ATO's own example draws the line at the door: a bandage applied during a GST free consultation is GST free, and extra bandages, dressings and antiseptics the patient takes home are not.

A cervical pillow, a support brace, tape or a foam roller sold at the counter is a taxable sale. The exception is a medical aid or appliance meeting all three ATO conditions: listed in schedule 3 to the GST Act or in the regulations, specifically designed for people with an illness or disability, and not widely used by people without one. Which items pass is a list the practice builds with its BAS agent, and the template takes it as an item level override rather than a second account. The treatment side is on products and equipment.

Reports written because someone else asked

The second taxable line is the report. The ATO's worked example, written for medical reports, is a progress report an insurer asks for on a patient already being treated: not GST free, because no Medicare benefit is payable for the report, the insurer is the recipient of that supply, and the report is not a natural part of the treatment. The template follows that with one account for reports, assessments and medico-legal work at the taxable rate.

The account is a default, not a ruling. A report that is an ordinary and natural part of the treatment the patient engaged the practice for is a different fact pattern, and one for the practice and its BAS agent rather than for a chart of accounts.

Why the Medicare account still earns its line

It is tempting to leave Medicare out of a chiropractic chart. The schedule says otherwise: item 10964 is a chiropractic health service by an eligible chiropractor on a chronic condition management referral, at least 20 minutes, and capped at five services a calendar year across the whole chronic condition management subgroup rather than five chiropractic ones. The schedule fee is A$74.55 and the benefit 85 percent of it, A$63.40.

It is a small share of the revenue and a real one, and it arrives on its own rail with its own timing. A practice that takes referrals keeps the Medicare revenue account and its clearing account. A practice that takes none can add both the week the first referral arrives, which beats finding the benefit in the private account after the quarter closed.

The lines to add when the practice bills more

The nine accounts are a starting chart, not a ceiling. Each line below is already in the canonical template with its own reason and rate.

NDIS work, which takes a revenue account per management type and a written agreement check before anything is treated as GST free.
Employee assistance and corporate contracts, where the employer is the recipient of the supply, so the template codes them taxable.
Supervision, training and workshops, which the template treats as taxable and flags for the practice's BAS agent.
DVA work, which follows the same listed service test as Medicare and is paid by Services Australia on DVA's behalf.
An item override on the cancellation account, so a cancelled report or training booking takes the taxable rate, as cancellation fees sets out.

What Ledger Map does with this chart

Ledger Map holds one standing map for the practice, approved before anything syncs, and the chart above is where that map starts here. When a fund settlement or a card batch arrives, it posts one balanced document set per deposit against the account the map names, and leaves one exact match in the bank feed to click. A line the map cannot resolve becomes a question with the options laid out, not a quiet posting.

Nothing here is a treatment the product chose. The accounts, the rates and the reasons come from the canonical template, and the practice approves the map before it runs. See how that works on how it works, the fund benefit question on health fund benefits, or the rails on the funders hub.

Questions

Is chiropractic GST free in Australia?
Chiropractic is one of the health services the ATO lists as capable of being GST free, and the listing is one of three conditions rather than the whole test. The service also has to be performed by a recognised health professional in that listed service and be generally accepted in that profession as necessary for the appropriate treatment of the recipient of the supply. Preventative care and routine check-ups sit inside the ATO's description of appropriate treatment.
How many income accounts does a chiropractic practice need in Xero?
Nine covers a single site practice in the canonical allied health template: private patients, Medicare, the health fund benefit, WorkCover, CTP and TAC, reports, products, cancellations, and other income. Five clearing accounts sit beside them, one per settlement rail. A practice that also bills NDIS or corporate contracts adds a revenue account for each, because the recipient of the supply differs and so does the tax rate.
Why split the health fund benefit and the patient gap into two accounts?
Because two payers settle them on two clocks. The approved fund benefit reaches the practice account through HICAPS after the terminal settles the day, and the gap rides the card batch to the acquiring bank. Two revenue accounts and two clearing accounts let a practice see what its fund work is worth and spot a fund settlement that has not arrived, instead of reading it as a slow month.
Do braces, pillows and tape sold at the counter carry GST?
Generally yes. Goods are GST free only where they are a necessary part of the service, supplied at the same time and place, and either specific to that patient's condition or essential to that consultation, which is why the ATO treats items the patient takes home as taxable. A medical aid or appliance listed in schedule 3, specifically designed for people with an illness or disability and not widely used by people without one, is the exception, and which items qualify is a list the practice builds with its BAS agent.
Does a chiropractic practice need a Medicare account in Xero?
It does if it takes chronic condition management referrals. MBS item 10964 covers a chiropractic health service of at least 20 minutes provided by an eligible chiropractor, capped at five services a calendar year across the whole chronic condition management subgroup rather than five chiropractic ones, with a schedule fee of A$74.55 and an 85 percent benefit of A$63.40. A practice taking no referrals can leave the account out and add it, with its clearing account, the week the first one arrives.

Sources

Open questions

Whether a report that is an ordinary and natural part of the treatment a patient engaged the practice for is GST free is a fact pattern for the practice and its BAS agent. The template defaults the whole report category to taxable and this page leaves it there.
Which of a clinic's retail items are schedule 3 medical aids is a per item question. The template asks the practice to list them and set an item level override rather than move the account.
HICAPS does not publish whether a day's fund benefits arrive as one deposit or one per fund, so the clearing account may need splitting once the practice's own feed has been watched. No HICAPS document read here dates the fund's own payment against the terminal settlement, and no bank narration is stated for any rail.
Supervision of another practitioner is taxable by default in the template, and one ATO snippet points the other way on a specific fact pattern, so this page names the account and leaves the question open.
No search results snapshot was captured for this query, so the FAQ is drawn from the manifest question strings and the corpus rather than from a recorded People also ask block. Capture it before publication.

HICAPS pricing
HICAPS. Retrieved 4 Sep 2026.
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HICAPS terminal user guide
HICAPS. Retrieved 29 Aug 2026. Source updated Nov 2020.
primary
GST and health, other health services
Australian Taxation Office. Retrieved 3 Sep 2026. Source updated 12 Jun 2024.
primary
GST and health, appropriate treatment
Australian Taxation Office. Retrieved 3 Sep 2026. Source updated 12 Jun 2024.
primary
GST and health, goods supplied as part of a GST free health service
Australian Taxation Office. Retrieved 3 Sep 2026. Source updated 12 Jun 2024.
primary
GST and health, medical aids and appliances
Australian Taxation Office. Retrieved 3 Sep 2026. Source updated 8 Oct 2025.
primary
GST and health, medical services
Australian Taxation Office. Retrieved 3 Sep 2026. Source updated 12 Jun 2024.
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MBS item 10964, chiropractic health service under chronic condition management
MBS Online. Retrieved 3 Sep 2026. Source updated 1 Jul 2026.
primary
Bookkeeping for an allied health clinic, chart of accounts and tracking categories
True Tally. Retrieved 3 Sep 2026. Source updated 1 Jul 2026.
secondary
Allied health by funding source, the canonical template
Ledger Map. Retrieved 3 Sep 2026.
primary

Review

Last reviewed 3 Sep 2026 by Shane

General information for Australian allied health practices, not tax advice. Confirm a treatment with your BAS agent or accountant before you post it.

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