Templates
Physiotherapy chart of accounts for Xero
Split revenue by who pays rather than by who treated. A physiotherapy practice bills the same consult to private patients, Medicare, DVA, health funds, NDIS, WorkCover and CTP or TAC insurers, so the chart carries one revenue account per payer, a taxable account for reports and products, and one clearing account for each settlement rail. Practitioner and location go in tracking categories.
Key facts
- Where physiotherapy sits in the GST Act
- It is one of the listed health services, so a consult is GST free where a recognised professional performs it and the profession accepts it as necessary for the appropriate treatment of the recipient2
- Revenue accounts in the canonical template
- Eighteen, split by who pays rather than by practitioner, with twenty three rows deciding which one a line lands on1
- The compensation insurers
- 407 Clinical services, WorkCover and workers compensation, and 408 Clinical services, CTP and TAC, both at GST Free Income1
- The report on the same claim
- 420 Reports, assessments and medico-legal, at GST on Income, because the insurer rather than the patient is the one the report is supplied to1
- The rule the report account is built on
- The ATO states it for medical reports: one is GST free only where a Medicare benefit is payable for it or it is an ordinary and natural part of the GST free service. Its own example of a report that is neither is a progress report a compensation insurer asks for4
- The health fund benefit
- GST free under the third party rule, which the ATO illustrates with a physiotherapist treating a fund member under an agreement with the fund3
- Massage inside a consult
- Massage therapy on its own is not GST free, and the ATO names physiotherapy as a listed service it can be supplied as part of, where the profession accepts it as a standard component of treatment2
- Settlement rails the template models
- Ten, each with its own clearing account, plus a practice defined slot for a deduction the ten do not cover, because the rail that produces a bank line is rarely the funding source on the invoice1
- How many practices this describes
- IBISWorld counts 9,963 physiotherapy services businesses in Australia as of 2026, an increase of 4.9 percent on 20258
One consult, seven payers
A physiotherapy practice sells one thing and bills it to whoever is paying that day. The same half hour is a private consult at the desk, a health fund benefit through a terminal, a Medicare item, a DVA card, an NDIS support, a WorkCover claim or a CTP claim. The clinical note is the same. The money behaves differently every time.
A physio clinic in West Melbourne, or anywhere across Melbourne's inner suburbs, typically receives income from at least four or five distinct funding streams at once: Medicare, private health insurers, NDIS, DVA and direct private payments.9
That is why the chart splits revenue by payer. A single Clinical income account says nothing about which funder is slow, which one is short paying, or which one carries GST. Splitting by payer costs a handful of account codes and answers all three off the profit and loss.
The revenue accounts, and the rate on each
The canonical allied health template carries the accounts below. The codes are its own 400 series, and the Xero tax rate is the one it posts at, so a practice starting here starts from a file with a stated reason on every line.
| What was billed | Revenue account | Xero tax rate |
|---|---|---|
| Private, a consult | 400 Clinical services, private patients | GST Free Income |
| Medicare bulk bill, a consult | 401 Clinical services, Medicare | GST Free Income |
| DVA, a consult | 402 Clinical services, DVA | GST Free Income |
| Health fund, a consult | 403 Clinical services, private health fund benefit | GST Free Income |
| NDIS plan managed, a consult | 405 Clinical services, NDIS plan-managed | GST Free Income |
| WorkCover, a consult | 407 Clinical services, WorkCover and workers compensation | GST Free Income |
| CTP or TAC, a consult | 408 Clinical services, CTP and TAC | GST Free Income |
| WorkCover, reports | 420 Reports, assessments and medico-legal | GST on Income |
| Private, products | 422 Products and equipment sales | GST on Income |
Two things stand out for this profession. The insurer accounts sit side by side rather than merged, and the report account sits at a different rate to the treatment it reports on.
The insurer block is where a physiotherapy chart earns its keep
Musculoskeletal work brings compensation money in the door, which is the part of the chart a generic template handles worst. The template gives WorkCover its own revenue account and gives CTP and TAC insurers another, both GST free, on the third party rule: where a service is GST free supplied to the patient it stays GST free when the practice contracts with an insurer, an operator of a statutory compensation scheme, a compulsory third party scheme or an Australian Government agency.
Keeping the two insurer accounts apart is not tidiness. WorkCover Queensland pays the practice itself once a claim owner authorises the invoice, while TAC and CTP insurers pay directly or through a claiming gateway with their own remittances. Merged into one account, a receivable stuck behind an authorisation looks the same as one stuck behind a bad invoice.
Where a deposit lands before it is revenue
Revenue is half the chart. The other half holds a settlement between the day a funder approves a claim and the day the money reaches the bank feed. The template's rule is one clearing account per settlement rail, not per funding source, because the rail is what produces a bank line.
| Settlement rail | Clearing account | Why it has its own |
|---|---|---|
| Medicare | 100 Medicare clearing | Medicare pays per payment run per payee provider number, so a practice with several provider numbers can see more than one Medicare deposit a day. |
| HICAPS | 104 HICAPS clearing | HICAPS fees are billed monthly as a separate direct debit, not netted from the daily settlement, so the daily deposit should reconcile to the gross fund benefit alone. |
| Tyro Health | 105 Tyro Health clearing | Tyro Health bills its claiming fees monthly rather than netting them from each settlement. |
| NDIA | 102 NDIA clearing | The NDIA's Payee Payment Remittance Advice is one row per claim line, not per invoice, and appends a system suffix to the practice's own invoice reference that the matcher has to strip. |
| WorkCover Queensland | 108 WorkCover clearing | A direct government-scheme EFT, with no merchant fee on this rail. |
| TAC, CTP and direct insurers | 109 Insurer clearing (TAC, CTP, icare direct) | Covers insurers paying directly rather than through Tyro Health or HICAPS Digital. |
Two legs, two tax types, and they are separate postings. The revenue leg carries the tax rate of the supply, which for a consult is GST Free Income. The settlement leg posts at BAS Excluded in every canonical template, because moving money already recognised as revenue is not a second supply.
The ATO's own worked example is a physiotherapist
Health fund work arrives as a benefit paid through HICAPS with a gap collected at the desk, and the ATO chose this profession to illustrate the rule. Its example has a fund with an agreement with a physiotherapy practice to treat members, and concludes that the supply to the fund is GST free because the same treatment would be GST free supplied to the member directly.
- The example turns on the fund settling a claim under its own policy, not on the fund simply paying the practice's invoice.
- Health services supplied to any other third party are not GST free, which separates a fund, a scheme or an agency from an employer buying assessments.
- The parties can agree not to treat the supplies as GST free, so the template asks a practice to confirm none of its schemes has done that.
- The terminal settles the benefit on its own rail, so the money lands in the HICAPS clearing account before it is matched off the fund's report.
Massage inside a physiotherapy consult
Massage therapy supplied on its own is not GST free, because it is not a listed health service. The ATO then names physiotherapy as an example of a listed service that massage can be supplied as part of, and sets out what has to hold for it.
- It is supplied as part of a listed health service, and the ATO's own example of one is physiotherapy.
- The person supplying it is a recognised professional in the listed health service and is also trained in massage therapy.
- The listed health service profession considers the massage a standard technique or component of treatment for that service.
- The profession accepts it as necessary for the appropriate treatment of the recipient of the supply.
The taxable lines a physiotherapy practice still carries
A practice whose treatment is GST free still makes taxable supplies, and each has an account in the template. A report an insurer asks for is the common one: the template posts the treatment on the claim as GST free and the report on it as taxable, so one claim can produce two revenue lines at two rates.
- Reports, assessments and medico-legal work, on account 420 at GST on Income.
- Products and equipment sold at the desk, on account 422. Goods are GST free only where they are a necessary part of the health service and supplied at the same time and place, which tape taken home is not.
- Training, workshops and speaking, on account 421, which the template shares with supervision.
- Employee assistance and corporate contracts, on account 409, where the employer rather than the patient is the recipient of the supply.
Medical aids and appliances are the exception, and the ATO's position is that one is GST free only where it is listed in Schedule 3 to the GST Act or the GST regulations. That is a per item question rather than a per account one, so the template holds it as an item override for the practice to set.
Practitioner and location belong in tracking, not in the chart
The instinct in a growing practice is an account per physiotherapist, which gives a chart nobody can read by the third hire. Xero allows two active tracking categories, and this template spends them on Practitioner and Location, which is why funding source lives in the account code instead.
- Revenue account answers who paid, the question a funder chase starts with.
- The practitioner tracking category answers who earned it, the question a payout run starts with.
- The location tracking category answers which site it belongs to.
- Anything needing a third dimension is a report filter or a second Xero organisation, not a third tracking slot.
Setting the chart up in Xero
Order matters here: a clearing account created after the first settlement means re-coding a month of bank lines.
- Create the revenue accounts for the payers the practice bills, and leave the rest out until they are needed.
- Set the tax rate on each one as the template states it, rather than leaving the Xero default in place.
- Create one bank type clearing account per rail the practice settles on, following how to set up a clearing account.
- Create the two tracking categories before importing history, so the first month of invoices carries them.
- Ask the practice's BAS agent to confirm the taxable lines and any item level overrides before the first BAS on the new chart.
What Ledger Map does with this chart
Ledger Map holds the chart above as a standing map the practice approves once. Each invoice line resolves to its account and tax rate through that map, and each funder deposit posts as one balanced document set with the invoices underneath it, leaving one exact match in the bank feed to accept.
Where a line does not resolve, it becomes a question with the options laid out rather than a silent posting. Nothing on this page is a treatment Ledger Map chose: the accounts, the rates and the reasons come from the canonical template a practice starts from, and the practice approves the map before anything syncs. See how it works for the approval step, or the allied health template this chart is cut from.
Questions
Is physiotherapy GST free in Australia?
Physiotherapy is one of the listed health services, so a consult is GST free where three things hold: it is a listed health service, a recognised health professional in that service performs it, and the profession generally accepts it as necessary for the appropriate treatment of the recipient of the supply. The ATO adds that a service has to be one of the listed services and cannot just be similar to one.
How many revenue accounts does a physiotherapy practice need in Xero?
One per payer the practice actually bills, plus one each for reports, products, training and supervision. The canonical allied health template carries eighteen revenue accounts in total, and the table on this page shows the nine a mixed physiotherapy book posts to, seven of them payer accounts. Splitting by payer is what lets the profit and loss show which funder is slow without opening a single invoice.
Which account does a WorkCover report go to?
Account 420, Reports, assessments and medico-legal, at GST on Income, while the treatment on the same claim posts to account 407 at GST Free Income. The rule the template builds that on is the ATO's rule for medical reports: one is GST free only where a Medicare benefit is payable for it or it is an ordinary and natural part of the GST free service. A progress report a compensation insurer asks for is the ATO's own example of a report that is neither.
Do I need a separate account for every health fund?
No. Fund benefits share one revenue account, 403 Clinical services, private health fund benefit, because the fund is paying for the same supply to the same patient. What does get its own account is each settlement rail, so a HICAPS terminal and a Tyro Health terminal land in different places and each daily deposit can be matched against the report that explains it.
Where do the tape and braces sold at the front desk go?
Account 422, Products and equipment sales, at GST on Income. Goods are GST free only where they are a necessary part of the health service and supplied at the same time and place, so strapping used during the consult is treated differently from a roll the patient takes home. Medical aids listed in Schedule 3 to the GST Act are the exception, and the template holds those as item level overrides.
Sources
Open questions
- No search results snapshot was captured for this page's target query, so the answer landscape in the brief is inferred from two adjacent sources rather than read from the results. The FAQ pairs come from the questions those sources leave open rather than from People also ask.
- Supervision of another practitioner is taxable in the canonical template and in the practitioner literature, while an ATO interpretative decision points the other way on one fact pattern. The corpus leaves it open, so this page does not settle it.
- Whether any compensation or compulsory third party scheme a practice bills has used the option to agree not to treat its supplies as GST free is not published scheme by scheme. The template asks the practice to confirm it.
- Whether a particular brace or orthosis is a listed medical aid, and so GST free whoever buys it, is a per item question. The template holds it as an item override rather than an account level rule, and the ATO's medical aids page does not name orthoses either way.
- The ATO states the medical reports rule on its medical services page, which covers medical practitioners rather than the listed health services physiotherapy sits under. The template applies the same reasoning to a physiotherapy report because the insurer is the one the report is supplied to. A practice with a large medico-legal book should have that confirmed rather than read off this page.
- Where a patient pays a gap on a health fund claim, whether that gap is part of the supply made to the fund or a separate supply made to the patient is not settled by the sources read here. Both are GST free on the listed service test, so the rate is the same either way, but the account the gap lands on follows the payment method the practice used and is worth checking.
- Exercise physiology, remedial massage and allied health assistant work delivered by staff who are not physiotherapists sit outside the listed service test, so a practice employing them needs a taxable revenue line of its own. How much of a book that is varies by practice.
- IBISWorld prints no last updated date for the business count, so the figure is dated by the year it names rather than by a page date.
- GST and health: other health services
Australian Taxation Office. Retrieved 3 Sep 2026. Source updated 12 Jun 2024.
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- GST and health: supply of services through a third party
Australian Taxation Office. Retrieved 3 Sep 2026. Source updated 12 Jun 2024.
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- GST and health: medical services, including medical reports
Australian Taxation Office. Retrieved 3 Sep 2026. Source updated 12 Jun 2024.
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- 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.
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- GST and health: medical aids and appliances
Australian Taxation Office. Retrieved 3 Sep 2026. Source updated 8 Oct 2025.
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- GST and health: recipient of the supply
Australian Taxation Office. Retrieved 3 Sep 2026. Source updated 12 Jun 2024.
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- Bookkeeping for physiotherapy clinics
True Tally Bookkeeping. Retrieved 3 Sep 2026. Source updated 1 Jul 2026.
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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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