Resources: Blogs

The High Court of Australia (High Court) has handed down its decision in Uber Australia Pty Ltd v Chief Commissioner of State Revenue [2026] HCA 40, confirming that payments remitted by Uber Australia Pty Ltd (Uber) were deemed wages for payroll tax purposes in New South Wales.

In Uber to pay $81.5 million in payroll tax, we reported on the earlier decision of the Supreme Court of New South Wales Court of Appeal (NSWCA) in Chief Commissioner of State Revenue v Uber Australia Pty Ltd [2025] NSWCA 172, which found that Uber was liable to pay $81.5 million in payroll tax.

In 2021, the Chief Commissioner of State Revenue (Commissioner) issued Uber a payroll tax assessment of $81.5 million for the 2015 to 2020 financial years, which was assessed pursuant to the “contractor provisions” under the Payroll Tax Act 2007 (NSW) (PTA (NSW)).

Under the PTA (NSW), payments made to independent contractors under a “relevant contract” are deemed to be “taxable wages” liable for payroll tax, subject to certain exemptions.

Uber objected to the Commissioner’s assessment and in the first instance, the Supreme Court of New South Wales found that Uber was not liable for the payroll tax.

This was overturned by the NSWCA, which unanimously held that the Uber drivers’ contracts were “relevant contracts” for the purposes of the contractor provisions under the PTA (NSW), finding that:

• the drivers’ services were “in relation to the performance of work” for Uber;
• payments to the Uber drivers were collected from riders and remitted to drivers through Uber and as such were amounts “paid or payable” by Uber;
• use of a personal car and the rating services performed by the Uber drivers and riders were not ancillary to the performance of work.

The recent decision of the High Court considered Uber’s appeal of the NSWCA decision. Uber submitted that the driver contracts were not “relevant contracts” for the purposes of the PTA (NSW) on three grounds:

1. the driving services were neither supplied to Uber, nor were they supplied under the driver contracts;
2. the driving services were “ancillary… to the use of goods which are the property of” the drivers – namely, the driver’s vehicles – which is one of the exemptions to the contractor provisions under the PTA (NSW); and
3. the remittances by Uber to drivers were not amounts “paid or payable” by Uber to the drivers “for or in relation to the performance of work relating to a relevant contract” – and therefore were taxable wages under the PTA (NSW).

The High Court, by majority, rejected all three grounds of Uber’s appeal.

The High Court held that:

• The driving services were supplied to Uber under a relevant contract, being the driver contract. The driver contract imposed certain obligations owed by the drivers to Uber, including the obligation to drive the rider to their destination. The High Court compared this to that of a casual employee, who is under no express obligation to accept work, but once work commences, they are under certain obligations imposed by a contract.
• The primary object of the driver contract was the supply of driving services, not a contract for the use of a car. Accordingly, the exemption that the driving services were ancillary to the use of goods was rejected.
• The fares remitted to the drivers were connected to the performance of work, being the driving services. Under Uber’s rideshare system, rider payments were funnelled through Uber and Uber had substantial control over the fares before they were remitted to drivers. The remitted amounts from Uber to drivers were paid or payable for or in relation to the performance of work under a relevant contract and therefore deemed wages under the PTA (NSW).

The High Court concluded that Uber was liable to pay $81.5 million in payroll tax and dismissed the appeal with costs.

Lessons for employers

The High Court has now ruled on its position regarding the deeming provisions in payroll tax legislation. Importantly, businesses cannot avoid payroll tax liability by characterising workers as independent contractors or positioning themselves as intermediaries responsible for collecting or remitting payments.

The effect of this decision extends beyond rideshare businesses and the gig economy, with broad implications for all businesses that engage contractors and other workers with employment-like relationship.

Practically, businesses that engage contractors should review their contractual arrangements and ensure that they comply with the payroll tax provisions in the relevant jurisdiction. Consideration should be given to the services performed by contractors, the standards imposed on contractors and payment arrangements.

Although the High Court’s decision deals with payroll tax legislation in New South Wales, we note that efforts were made in 2007 to harmonise payroll tax legislation, with the States and Territories adopting similar legislation or amendments to legislation to align provisions.

‍

Information provided in this blog is not legal advice and should not be relied upon as such. Workplace Law does not accept liability for any loss or damage arising from reliance on the content of this blog, or from links on this website to any external website. Where applicable, liability is limited by a scheme approved under Professional Standards Legislation.‍