Medical practices
How much is my medical practice worth?
Your medical practice is worth the earnings it can sustain once every doctor, you included, is paid at market rates for their clinical work, capitalised at a rate that reflects the risk of those earnings continuing under a new owner. Three things move both halves of that further than anything else.
No multiples published. The reasoning is, in full.
What the answer depends on
The three things that move the number most
These are not the only inputs. They explain most of the distance between two practices reporting the same profit.
How much of the billing the departing doctor produces personally
A Medicare provider number is issued to the practitioner, follows their registration with the Australian Health Practitioner Regulation Agency and is location specific, so none of it transfers with the business. The valuation replaces the owner's drawings with what a replacement would cost on the same service fee terms the other doctors pay, then asks how many of the remaining patients attend the practice rather than a named person. What happened the last time a doctor left is the strongest evidence available, and it is usually to hand. Billings concentrated in the seller is the most common reason a practice is worth less than its owner expected.
Where the practice stands on contractor payroll tax
Most private practice doctors are engaged as contractors, or as tenant doctors paying a service fee. In Thomas and Naaz Pty Ltd v Chief Commissioner of State Revenue [2023] NSWCA 40 the New South Wales Court of Appeal dismissed the summons seeking leave to appeal against payroll tax assessments on payments to contracted doctors. States have since legislated relief on different terms, the Queensland Revenue Office exempting wages paid to a contracted or employee general practitioner with no bulk billing condition while Revenue NSW gives a rebate tied to bulk billing thresholds. Two numbers follow: ongoing payroll tax reduces maintainable earnings, and unresolved historical exposure is a liability deducted from value. Confirm your position with your accountant.
The billing mix, and whether the income behind it transfers
An assigned Medicare benefit moves with the schedule; a private gap does not. Services Australia states that under the Bulk Billing Practice Incentive Program, running since 1 November 2025, participating practices meeting the criteria receive an additional 12.5 per cent incentive payment on every dollar of MBS benefit from eligible services, and that participation requires bulk billing all eligible services and registration for MyMedicare. It is voluntary and can be stopped, so that income is a policy choice rather than a fixed attribute. Practice incentives run through accreditation, and the Practice Incentives Program guidelines state that on a sale the accreditation must be part of it for the accreditation and the historical practice data to transfer.
Higher or lower
What would move your number up, and what would move it down
Pushes the number up
- Billings spread across several doctors, none of whom the practice cannot trade without.
- Signed service agreements with real notice periods and restraints a buyer can rely on.
- Accreditation current, and the sale structured so it and the practice history transfer.
- A lease with unexpired term and options at the site patients already drive to.
- A payroll tax position worked through, provided for and documented.
Pushes the number down
- One doctor producing most of the billings, particularly where that doctor is the seller.
- An owner-doctor paying no service fee, so the reported profit is not repeatable.
- Doctors on handshake terms, month to month, or free to move to a practice nearby.
- Historical payroll tax exposure that nobody has quantified.
- A short lease with no options in a fitted-out site that cannot be moved.
The evidence
What sets the number, in practice
The evidence is your own practice's: several years of financial statements normalised for owner-specific and non-recurring items, billings by doctor by month, the service agreements, the lease, the accreditation certificate, incentive statements and the payroll tax position.
One structural point then decides more than any of them. In a doctor-owned practice the entity bills Medicare and patients, pays the doctors and keeps the balance. In the medical centre model a service entity holds the lease, equipment and non-clinical staff and charges each doctor a service fee, so it does not own the doctors' billings. Valuing the second as though it were the first is the commonest and most expensive error in pricing a practice.
Where the line is
Why there is no multiple on this page
A capitalisation multiple is the inverse of the return a buyer requires from a specific business, so it is a conclusion about one practice rather than a property of the sector. It is set by exactly the things above.
The mechanical objection is stronger. A multiple struck on earnings before interest and tax is not interchangeable with one struck before depreciation and amortisation as well, and neither can be applied to the profit in an unadjusted profit and loss statement. Almost every owner who reaches for a rule of thumb applies it to earnings that still include their own uncharged clinical work, the largest single adjustment in a medical practice. Any figure quoted before the analysis is a guess with a decimal point on it.
What it costs to find out
A fixed fee, published before you ask for it
An indicative assessment is a flat $950 plus GST, credited against a valuation report if you proceed within 3 months. A full valuation report is a fixed fee set by the annual revenue of the business being valued, $1,500 plus GST at the smallest band and $9,450 plus GST at the largest, and an expert report for a family law matter or a dispute is priced separately on the same bands. Every fee is agreed in writing before work starts and never depends on the conclusion reached.
Indicative assessment
$950
One fee whatever the size of the business, credited against a valuation report if you proceed within 3 months.
Valuation report
- Up to $1 million
- $1,500
- $1 million to $3 million
- $2,200
- $3 million to $10 million
- $4,950
- Above $10 million
- $9,450
Expert report
- Up to $1 million
- $2,700
- $1 million to $3 million
- $3,950
- $3 million to $10 million
- $8,900
- Above $10 million
- $16,950
Every fee above is fixed and quoted plus GST, and is agreed in writing before any work starts. Bands are set on annual revenue. A business sitting exactly on a boundary pays the lower fee. See the full fee schedule
Go deeper
Read the full analysis
- Sector pageMedical practice valuationsThe complete treatment: methods, earnings adjustments, sector risks, value drivers, the information required and detailed FAQs.Read
- MethodologyHealthcare business valuation methodsHow maintainable earnings, capitalisation, discounted cash flow, net assets and market evidence each work, and when each applies.Read
FAQs
Medical practice valuation questions
How much is my medical practice worth?
It is worth the maintainable earnings the practice can produce once every doctor, including you, is paid at market rates for their clinical work, capitalised at a rate reflecting the risk of those earnings continuing without you. The starting point is not the profit in your accounts: it is that profit after your clinical work is charged at replacement cost, related-party rent and wages are reset to market and one-off items are removed.
Does my Medicare provider number transfer when I sell my practice?
No. A provider number is issued to the individual practitioner, follows their Ahpra registration and is tied to a location, so it cannot be sold with the business or used by another doctor. What can transfer is the site, the patient records and recall systems, the team, the doctors' agreements and restraints, MyMedicare registrations and, where the sale carries it, accreditation.
How does payroll tax affect what my practice is worth?
In two ways that are often confused. Ongoing payroll tax on contractor doctor payments, where it applies, is a cost of running the practice and reduces maintainable earnings. Unquantified exposure for past periods is a contingent liability, assessed on its own and deducted from equity value. Relief differs by state, so confirm your position with your accountant.
What is my practice worth if I am the only doctor?
Less than the same billings spread across several doctors, and the gap is often large. Where one practitioner produces the fees, most of the earning capacity is personal goodwill, which cannot be sold. What remains is the site, the lease, the records and recall systems, the staff and whatever share of patients attend the practice rather than you.
How much does it cost to find out what my practice is worth?
An indicative assessment is a flat $950 plus GST, credited against a valuation report if you proceed within 3 months. A full valuation report is a fixed fee set by the annual revenue of the business being valued, $1,500 plus GST at the smallest band and $9,450 plus GST at the largest, and an expert report for a family law matter or a dispute is priced separately on the same bands. Every fee is agreed in writing before work starts and never depends on the conclusion reached. The full schedule, including the additional entity fee for groups that trade through more than one entity, is published on the pricing page.
Make your next decision with a clear understanding of value.
Tell us about your healthcare business and the purpose of the valuation. We will confirm the appropriate scope, information requirements, timeframe and the fee band that applies.