Uber’s long–running payroll tax dispute has entered a new phase. The High Court of Australia is set to consider whether payments made to rideshare drivers fall within the scope of the payroll tax contractor provisions, a decision with far-reaching consequences for platform-based businesses and the gig economy.
Background: what is the Uber payroll tax dispute?
The dispute centres on payroll tax assessments issued to Uber Australia Pty Ltd for the 2015–2020 financial years, with total payroll tax liabilities exceeding $81 million. The assessments relate to fares collected by Uber from riders and remitted to drivers, net of Uber’s service fee.
At first instance, the Supreme Court accepted Uber’s argument that it acted merely as a payment collection agent and that driver payments were not “for or in relation to the performance of work”, the threshold test under the Payroll Tax Act 2007 (NSW) (“the Act”). Uber succeeded at trial.
NSW Court of Appeal decision: Chief Commissioner v Uber Australia (2025)
On 1 August 2025, the New South Wales Court of Appeal unanimously overturned Uber’s earlier first instance win in Chief Commissioner of State Revenue v Uber Australia Pty Ltd. The Court of Appeal rejected the payment agency argument and held that payments remitted to drivers constituted taxable wages under the Act.
The Court of Appeal concluded that:
- Uber drivers supplied driving services to Uber, not directly to passengers, under “relevant contracts” within the meaning of the payroll tax contractor provisions; and
- Payments made to drivers were sufficiently connected to the performance of work to be deemed wages for payroll tax purposes.
High Court special leave: what happens next?
Following the adverse appellate decision, Uber sought special leave to appeal to the High Court of Australia. Special leave was granted on 4 December 2025, clearing the way for the High Court to consider:
- the proper construction of the contractor provisions in Division 7 of the Act: and
- how those provisions apply to platform-based and gig economy business models.
Which businesses are most at risk from payroll tax on contractor payments?
This case is directly relevant to any business that engages contractors or operates as an intermediary in the flow of payments for services. Higher-risk business models include:
- Rideshare and transport platforms
- Food and grocery delivery platforms
- Digital marketplaces and freelancing platforms
- Medical and professional practices engaging practitioners on service fee arrangements
- Labour-intensive service providers relying heavily on contractor workforces
Key payroll tax risks on platform and contractor-based businesses?
Regardless of the High Court’s final ruling, Australian businesses should be aware of the following risks, which revenue authorities are already actively examining:
What are key risks?
- Labels are not determinative: Payments described as ‘commissions’, ‘distributions’ or ‘pass-through amounts’ may still be treated as taxable wages under payroll tax legislation.
- Agency arrangements offer limited protection: Acting as a’payment agent’ for customer payments does not, by itself, prevent payroll tax exposure.
- Increased compliance focus: State and territory revenue authorities are increasingly focused on contractor and employment agency provisions.
What businesses should do now: payroll tax contractor review checklist
While the High Court appeal is pending, businesses should not wait to review their payroll tax exposure. Practical steps include:
- Review contracting arrangements: nderstand who is supplying services to whom in substance, not just in form. The economic and operational reality matters.
- Map payment flows:dentify amounts that could be characterised as paid ‘for or in relation to work’ under the relevant payroll tax contractor provisions.
- Assess available exemptions: Determine whether any exemptions apply and ensure supporting documentation and evidence is robust.
- Monitor the High Court outcome: Be ready to revisit payroll tax positions promptly once the judgment is handed down.
