On 4 December 2025, the High Court unanimously granted the application made by Uber Australia Pty Ltd (Uber) for special leave to appeal against the decision in Chief Commissioner of State Revenue v Uber Australia Pty Ltd [2025] NSWCA 172.
In that case, the New South Wales Supreme Court of Appeal held that payments made by Uber to its drivers constituted wages for the purpose of calculating Uber’s payroll tax liability. As a result, Uber is now liable to pay just over $81.5 million in payroll tax for the 2015 to 2020 financial years.
The key issue in this matter is whether the contracts between Uber and its drivers each constitute a ‘relevant contract’. If that is the case, then Uber will be deemed an employer and, unless an exemption applies, liable for payroll tax calculated on payments made to the drivers, deemed employees, under the Payroll Tax Act 2007 (Act).
By way of recap:
- At first instance, the Supreme Court held that the Act did not apply to deem Uber’s payments to drivers to be wages, and accordingly Uber was not liable to payroll tax. This was because the payments from Uber to its drivers were not ‘for or in relation to’ the work undertaken by the drivers for Uber – rather, Uber provided its services to the riders (i.e. the customers), who paid for those services. In these circumstances, Uber was held to be a mere ‘payment collection agent’.
- On appeal, the Court of Appeal held that the contracts between Uber and the drivers were relevant contracts as the drivers were, in fact, providing a driving service to Uber. According, the payments by Uber to drivers were payments related to the work performed by the drivers in transporting riders. As no relevant exemption applied, Uber was liable for payroll tax calculated on the deemed wages paid to the drivers.
Our previous article analysing the decision of the Court of Appeal is available here.
Significance of the Uber case
In the current context where the various revenue offices are actively investigating payroll tax compliance, the decision of the High Court will be critical in confirming the interpretation of the payroll tax provisions. The current Court of Appeal decision is unfavourable for business, adopting a very broad interpretation of what type of arrangements constitute a relevant contract, so as to enliven the regime.
We recommend that owners of businesses that engage contractors carefully review their arrangements and confirm eligibility for any exemptions upon which they rely. Business owners should also review current payment arrangements with contractors and whether there is any flow of funds from the business to its contractors, which may be interpreted to be akin to wages.
We await the decision of the High Court and hope it provides much-needed clarity on the operation of the payroll tax provisions.
Contact us
Please contact Tamara Cardan, Special Counsel, on +61 3 9321 7862, if you would like to review your arrangements or if your business is the subject of a current investigation or audit regarding payroll tax compliance.
| Disclaimer: This publication contains comments of a general nature only and is provided as an information service. It is not intended to be relied upon, nor is it a substitute for specific professional advice. No responsibility can be accepted by Rigby Cooke Lawyers or the authors for loss occasioned to any person doing anything as a result of any material in this publication.
Liability limited by a scheme approved under Professional Standards Legislation. © 2025 Rigby Cooke Lawyers |