No, not for treatment. In Australia, psychology is a listed health service under section 38-10 of the GST Act, so a session delivered by a registered psychologist as appropriate treatment for the client is GST-free. GST can still apply to workshops, some third-party contracts, room fees and counselling by practitioners outside the listed professions.
The rest of this guide works through the grey areas using the Australian Taxation Office's own guidance, so you know where the lines sit before you talk to your accountant.
What makes a psychology session GST-free?
The ATO's page on other health services sets out three conditions, and all of them must be met:
- It is a listed health service. Psychology is on the list, alongside occupational therapy, social work, nursing and others.
- It is performed by a recognised professional in that service. For psychology, that means a person registered to practise psychology. The ATO's issues register states that only a person registered for the provision of psychology is a recognised professional in relation to psychology (issue 2.a.1).
- It is generally accepted in the profession as necessary for the appropriate treatment of the recipient. The ATO describes appropriate treatment as assessing a patient's health, working out a course of action to preserve, restore or improve their physical or psychological wellbeing, and supplying a treatment the profession accepts as appropriate.
There is a second route as well. A service for which a Medicare benefit is payable is a GST-free "medical service" under section 38-7, and the ATO notes that this first limb does not require the supplier to be a medical practitioner (medical services, paragraphs 3 and 5). For a psychologist billing Better Access items, both routes usually point the same way.
Do counsellors and psychotherapists have to charge GST?
This is where the answer changes. Counselling is not on the list of health services, and the ATO is explicit that "the service must be one of the listed services and cannot just be similar to one of these services". Its worked example is a remedial massage therapist whose work resembles physiotherapy but is still taxable.
Psychotherapy is treated a little differently. The ATO's view is that psychotherapy and psychoanalysis are not listed services in their own right, but they can be techniques within a listed service. So psychotherapy delivered by a registered psychologist as appropriate treatment is GST-free, and psychotherapy delivered by a psychiatrist can be GST-free under the medical services rules (issue 2.a.1).
In practice, that leaves three common positions:
- Registered psychologist: treatment sessions are GST-free.
- Social worker, occupational therapist or mental health nurse: sessions can be GST-free under their own listed service, provided they are a recognised professional in it. Where no state or territory registration law applies, the ATO's test is membership of a representative national professional association whose registration requirements are the same in every state and territory.
- Counsellor or psychotherapist with no listed-profession recognition: the service is taxable. If the practitioner is registered for GST, they include 10% GST in the fee. If they are not registered and not required to be, they charge no GST at all.
Which psychology services are not GST-free?
Registration does not make everything you sell GST-free. The appropriate treatment test applies to the service and the recipient, not the practitioner's title.
Workshops and prevention education. The ATO's issues register addresses this directly for psychologists and social workers: counselling after a traumatic experience can be GST-free if it is appropriate treatment, but "a psychological service directed at teaching people how to deal with stress or a traumatic experience if it should arise (that is education)" is not (group and prevention services). A corporate resilience seminar sits on the taxable side.
Group programs without individual assessment. A group session can be GST-free, but only where a medical practitioner or recognised professional has assessed that attendance is appropriate treatment for that particular person, and the session is run by a recognised professional. A general-information seminar open to anyone is not.
Assessments for someone else's purposes. The ATO's medical services guidance notes that where an assessment is made for insurance purposes and no treatment is involved, the insurer is the recipient and the supply is taxable (paragraphs 14 and 15). The same "appropriate treatment of the recipient" wording sits in the psychology test, so independent reports requested by lawyers or insurers deserve a separate check.
Clinical supervision and training for other practitioners. On the ATO's definition, appropriate treatment is about a patient's health. Supervising a colleague or running professional development is a service to that practitioner, not treatment of a client, so do not assume it is GST-free. Confirm the treatment of this income with your adviser.
Is EAP, workers compensation or DVA work GST-free?
It depends on who the client of the contract is. The ATO's guidance on supply of services through a third party says that if a service would be GST-free when provided to the patient directly, it stays GST-free when you contract with:
- an insurer
- an operator of a statutory compensation scheme
- a compulsory third party scheme operator
- an Australian Government agency, such as the Department of Veterans' Affairs.
The parties can agree not to treat those supplies as GST-free. Outside those four categories, the ATO says "Medical and other health services supplied to any other third party are not GST-free."
That matters for employee assistance programs. If a private EAP provider engages you to see its customers' employees, your supply is to that business, which is not one of the listed third parties. If instead the third party is simply paying your fee on the client's behalf, and your supply is to the client, the normal GST-free test applies. Read the contract to see who is engaging whom.
Does GST apply to the fee a contractor psychologist pays a practice?
Usually, if the practice is registered for GST. The ATO's page on the recipient of the supply describes two arrangements that look similar from the waiting room but differ for GST:
- The practitioner contracts the clinic for rooms and administration. The clinic's supply of rooms and admin to the practitioner is not GST-free, while the practitioner's supply to the patient can be.
- The clinic contracts the practitioner to see the clinic's patients. The practitioner's supply to the clinic is not usually GST-free, while the clinic's supply to the patient can be.
The ATO adds that the GST outcome "can only be determined by the contract" and that contracts should state clearly who is contracting whom. If you run a practice with contractors, your service agreement is also a tax document. The How to Start a Private Psychology Practice in Australia guide covers the wider structural decisions.
Do psychologists need to register for GST?
Possibly, even if every session is GST-free. The ATO's registration page says you must register when your GST turnover reaches $75,000 or more, and within 21 days of reaching it.
The detail people miss is what counts. GST turnover is the value of your supplies, with specific exclusions such as input-taxed supplies and supplies not connected with your enterprise. The ATO's ruling on the meaning of GST turnover, GSTR 2001/7, confirms that "supplies" in this calculation is not limited to taxable supplies, and GST-free supplies are not among the listed exclusions. A psychologist earning well over $75,000 in GST-free fees can therefore still be over the threshold.
Registration is not all cost. The ATO notes you can still claim credits for GST included in purchases you use to make GST-free sales, which is the key difference from input-taxed supplies. If you fail to register when required, the ATO says you may have to pay GST on sales made since the date you should have registered, plus penalties and interest.
How should a practice set up invoicing for GST?
Most mental health practices end up with GST-free treatment sessions plus a few taxable lines such as workshops, some reports, supervision or contractor room fees. A few habits keep that mix clean:
- Set the GST treatment per service type, not per invoice. A session, a workshop and a supervision hour each need their own default.
- Record the funding source on the appointment. Medicare, NDIS, a workers compensation insurer, a government agency and a private EAP company can each change the analysis.
- Keep cancellation fees separate. They have their own GST rules, covered in our guide to cancellation policies for psychology practices.
- State GST on published fees. Make it clear whether non-treatment services include GST. Our psychologist fees guide covers pricing.
- Review contracts once a year. Room agreements and EAP panels are where GST surprises tend to come from.
This is where practice software earns its keep. PractaLuma is AI-native practice management software for Australian mental-health practices, and its billing workflow connects invoices and claims to the appointment, clinician and funding details already in the record, so the practice reviews a billing queue instead of rebuilding each line item. If you are comparing options, see pricing.
FAQ
Is a Medicare-rebated psychology session GST-free?
Yes. A registered psychologist's treatment session meets the section 38-10 test, and a service for which a Medicare benefit is payable is also a GST-free medical service under section 38-7. If you are setting up Medicare billing for the first time, see our guide to the Medicare provider number for psychologists.
Do provisional psychologists charge GST?
Provisional psychologists hold registration with the Psychology Board of Australia, so the recognised professional condition can be met. Each service still has to pass the appropriate treatment test, and the recipient of the supply still matters.
Are NDIS psychology sessions GST-free?
Where the participant is the recipient, a registered psychologist's treatment session is usually GST-free under the health services rules already described. The ATO also has a separate set of GST-free NDIS supply rules, which require an NDIS plan in effect, reasonable and necessary supports specified in that plan, a written agreement, and a supply covered by the NDIS Determination.
Should a counsellor register for GST?
A counsellor must register once GST turnover reaches $75,000. Below that, registration is optional, and the ATO says that if you choose to register you generally must stay registered for at least 12 months. Because counselling is not a listed health service, a registered counsellor adds GST to their fees, so this is worth modelling with an accountant before registering voluntarily.
This article is general information based on ATO guidance available in September 2026 and is not tax advice. GST outcomes depend on your contracts and circumstances, so confirm your position with a registered tax agent or the ATO.