Problems
Synced invoices arrive with the wrong tax rate
One setting decides it. Cliniko sends a line with no tax on it using the Default Xero tax rate for tax exempt revenue, and every untaxed line takes that rate whatever the service was. A report or a product needs its own tax mapping, or it arrives on the exempt rate and the shortfall, one eleventh of that revenue, lands on the practice.
Key facts
- The setting behind it
- Default Xero tax rate for tax exempt revenue, chosen in the Cliniko integration settings alongside the default sales account when the Xero connection is made1
- What it catches
- Items without taxes in Cliniko, which sync across using it whatever the service on the line was2
- What decides a taxed line instead
- The Cliniko tax type mapped to a Xero tax rate, or the tax rate set on the billable item or the product itself2
- What the vendor says about one account
- Taxable and non taxable items can be pushed to the same Xero account as long as a tax exempt rate has been specified in the integration settings2
- What the sync does not read
- Who engaged the practitioner. The rate comes from the item, and the ATO tests who the supply was made to5
- The test a session has to meet
- A listed health service, by a recognised health professional in that service, generally accepted as necessary for the appropriate treatment of the recipient of the supply4
- What a report line carries in the templates
- Account code 420 on the GST on Income rate in all three canonical templates, named Reports, assessments and medico-legal in the allied health one6
- What a wrong default costs
- One eleventh of the affected revenue, either remitted on sales that carried no GST or assessed later on sales that did7
The one setting that decides the rate
When the Xero connection is made, Cliniko asks for two defaults before an invoice will move: a Xero sales account for invoice items, and a Xero tax rate for tax exempt revenue. Neither is optional and neither comes with guidance on what to pick. The second one is the whole of this problem, because it is applied to every Cliniko item that carries no tax of its own.
That is a lot of lines. In a health practice much of what gets billed carries no tax at the point it is raised, so the default is not an edge case setting. It is the rate on a large share of the invoice lines the practice sends across, chosen once during setup, usually by whoever happened to be connecting the two systems that afternoon.
What the sync can see, and what it cannot
Cliniko's tax mapping page is clear about the order it works in. A tax type mapped to a Xero tax rate wins. Failing that, a line takes the tax rate set on the billable item or the product. Failing both, it takes the tax exempt default. So the rate is decided by the item, and by nothing else on the invoice.
The ATO tests something the item does not know. Its condition for a health service that is not a medical service is that the service is a listed one, supplied by a recognised professional in that service, and generally accepted in that profession as necessary for the appropriate treatment of the recipient of the supply. The recipient is whoever engaged the practitioner, and a supply to another business is not usually treated the same way as a supply to the patient.
The gap between those two sentences is where the wrong rate comes from. The same appointment type, billed for a patient and billed for an insurer, is one item in Cliniko and two supplies to the ATO. The sync will do what the item says both times.
The error runs in two directions
Practices usually go looking for one of these and find the other. Which one a practice has depends on what the default was set to and on whether the taxable items were ever given a rate of their own.
| What synced | Where it lands | Why it happened |
|---|---|---|
| A clinical session, GST free | GST on Income, if the exempt default was left on the taxable rate | The exempt default was set to a taxable rate at setup, and an untaxed session takes it |
| A report written for an insurer or a lawyer | The tax exempt rate, with no GST on it | The report item carries no tax in Cliniko, so it takes the default like everything else |
| A product the patient takes home | The tax exempt rate, with no GST on it | A product has its own tax rate field, and it was left empty |
| An employer funded session | The tax exempt rate, with no GST on it | It is the same appointment item as a private consult, and the payer is not part of the tax decision |
The bookkeepers who work in these files put reports and product sales on the list of revenue that has to be coded deliberately, rather than swept into one GST free bucket, and they name when it comes to light.
Coding everything GST-free because "health is GST-free" is one of the most common errors we find in practice files, and it surfaces at the worst time, during an ATO review.8
What each direction costs in cash
This is the part the vendor documentation does not carry, and it is the reason the setting is worth a morning. Both directions cost one eleventh of the revenue that went across on the wrong rate. What differs is who ends up holding it, and whether the practice can get it back.
| Direction | The quarter | The money |
|---|---|---|
| GST free sessions on the taxable rate | A$120,000.00 of sessions synced on GST on Income | A$10,909.09 remitted on sales that carried no GST, recoverable by amending the statement |
| Taxable reports on the exempt rate | A$12,000.00 of reports synced on the tax exempt rate | A$1,090.91 of GST underpaid, on invoices that have already gone out at the lower price |
The first row is money the practice has already handed over and can ask for back. It is an amended activity statement and a conversation with the BAS agent, and the cash comes home. The second row is money the practice was meant to collect at the time and did not. Whether an insurer or a solicitor will accept a corrected invoice for a job finished last quarter depends on an agreement most practices do not have, so the shortfall usually stays with the practice along with whatever the ATO adds to it.
So the two directions carry different urgency at the same number of dollars. A practice that finds the first can take its time. A practice that finds the second is better off finding it early, while the invoices are recent enough to be worth reissuing.
What a report line was meant to carry
The canonical templates put a report on its own revenue account and its own rate, and they do it for a reason the ATO states rather than one the templates invented. Taxability turns on the report's purpose and its recipient, so a report engaged by an insurer, a school or a court is a supply to that business and takes the taxable rate whoever the patient is.
That is also the shape of the fix inside Cliniko. A report is a separate billable item with its own tax type, mapped to the taxable Xero rate, so it stops depending on a default meant for something else. The same goes for products, training and anything sold to another provider. The rate by rate picture across a whole chart of accounts is on Xero tax rates for health income, and the report case in detail is on reports and medico-legal work.
Where the tax mapping lives in Cliniko
Three separate places decide what a line arrives on, and a practice that has checked one of them often believes it has checked the others. Only the third is a default. The first two are where a practice takes the decision back.
- The tax types list, where each Cliniko tax type is mapped to a Xero tax rate. This is the mapping the vendor's own article is about, and it is what a line uses when it has a tax type.
- The tax rate on a billable item or a product, which is where a report, a workshop or a shoulder brace gets a rate that has nothing to do with the clinical default.
- The Default Xero tax rate for tax exempt revenue in the integration settings, which catches everything the first two did not.
Two other settings sit near these and are worth keeping distinct from them. The default sales account decides which revenue account a line lands in, and payment types map to their own accounts on the balance sheet, which is a movement rather than a sale. Neither of those changes the tax rate on a revenue line, and Cliniko's setup article states the two treatments separately.
The account question is its own problem, and it has its own page: all revenue in one sales account.
How to tell whether it happened
Three checks separate a practice that has this from a practice that does not, and each one is a few minutes of reading rather than a project.
| Check | What it tells you |
|---|---|
| Open a clinical revenue account for the quarter and read the tax rate on the lines in it | Whether one rate is carrying the whole account, which is the signature of a default doing all the work |
| Find the invoices for reports, products, training or employer funded sessions and read the rate on those lines | Whether the taxable side of the practice went across on the exempt default |
| Read the integration settings beside the Xero connection | Which rate the tax exempt default is actually set to, which is often the first time anyone has looked |
Run the second check first if a lodgement is close. It is the direction that gets more expensive with time, and it is the one a practice cannot fix by asking for money back from the ATO.
What this page does not settle
The same applies to a statement already lodged on the wrong rate. How far back it goes and whether it is worth amending are questions about one practice's numbers. The other direction of this fault, where a treatment lands outside the activity statement altogether, is on GST free exports as BAS Excluded, and the sync itself is described on the Cliniko integration page.
What Ledger Map does with it
Ledger Map decides the tax treatment from the standing map the practice approved, not from a default on a connection screen. The funding source and the service category resolve to an account and a rate together, so a report billed to an insurer and a session billed to the patient reach different rows even where the practice system holds them as one item.
A line the map cannot resolve becomes a question with the options laid out, rather than a silent posting on a rate nobody chose. For a deposit it posts one balanced document set and leaves one exact match in the bank feed. It does not pick a treatment for the practice, and the map is approved before anything posts. The shape of it is on how it works.
Questions
What is the Default Xero tax rate for tax exempt revenue?
It is a setting in Cliniko's integration settings, chosen when the Xero connection is made, alongside the default Xero sales account for invoice items. Items without taxes in Cliniko sync across using it. Cliniko asks for it but does not say which rate belongs there, because that depends on what the practice bills.
Why did a report sync as GST free when it should be taxable?
Because the report item carried no tax in Cliniko, so it took the tax exempt default like every other untaxed line. The rate comes from the tax type mapping or the item's own rate, and the report had neither. Giving the report item its own tax type and mapping it to the taxable rate is what separates it.
Can taxable and non taxable items share one Xero account?
Cliniko says they can, as long as a tax exempt rate has been specified in the integration settings. The invoices sync either way. What is lost is the separation, so a taxable report and a GST free session sit in one account on two rates, and a wrong rate on one of them is harder to see.
What does the wrong rate actually cost?
One eleventh of the revenue that went across on it. Sessions coded as taxable mean the practice remits GST on sales that carried none, which an amended activity statement can recover. Reports or products coded as exempt mean GST was underpaid on invoices already issued, and recovering that from the payer afterwards is rarely available.
Do I have to fix the invoices already in Xero?
That is a call for whoever prepares the activity statement, and it depends on how many quarters are affected and which direction they went. Setting the mapping first stops the next quarter joining the pile. The correction of what is already across is a Xero and BAS agent decision rather than an integration one.
Is a session GST free just because a funder paid for it?
Not on the ATO's test. A service that is not a medical service is GST free where it is a listed health service, supplied by a recognised professional in that service, and generally accepted as necessary for the appropriate treatment of the recipient of the supply. The recipient is whoever engaged the practitioner, which is not the same question as who paid.
Read next
- Practice systemsCliniko Xero integration: what syncs, what does not
- GST answersGST Free Income or BAS Excluded in Xero
- GST answersGST on reports and medico-legal work
- ProblemsGST free exports as BAS Excluded from Zanda
- ProblemsAll practice revenue lands in one Xero account
- GST answersGST on products sold to patients
- HubProblems
Sources
Open questions
- No search snapshot was captured for this query, so the current top five results, the People also ask set and whether an AI Overview shows are unknown. The FAQ was built from the questions the vendor documents leave open rather than from search data.
- Xero Central served an empty body to an automated fetch on 3 Sep 2026, so what each Xero rate does at G1 and 1A is stated from the research corpus behind the canonical templates rather than in Xero's own words, and a BAS agent is the check on it.
- Both Cliniko articles show an updated note rather than a date, so no source date is printed for the vendor half of this page.
- Whether the other practice systems apply a single tax exempt default the same way is not established. Cliniko is the one that names the field, which is not evidence that it is alone in the behaviour.
- Whether supervision sold to another provider, NDIS report writing, therapy assistant time and gift vouchers are GST free is unsettled in the research corpus, and is left to the practice and its BAS agent.
- The two worked quarters are illustrative amounts chosen to show the arithmetic. They are not drawn from a practice's file.
- Other health services, GST and health
Australian Taxation Office. Retrieved 3 Sep 2026. Source updated 12 Jun 2024.
primary
- Recipient of the supply, GST and health
Australian Taxation Office. Retrieved 3 Sep 2026. Source updated 12 Jun 2024.
primary
- Domain mechanics, Xero tax rate mapping and what each miscoding costs
Ledger Map. Retrieved 3 Sep 2026. Source updated 29 Aug 2026.
secondary
- Bookkeeping for speech pathology and allied health practices
True Tally. Retrieved 3 Sep 2026. Source updated Jul 2026.
secondary
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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