The New South Wales Court of Appeal has delivered its judgment in Chief Commissioner of State Revenue v Uber Australia Pty Ltd [2025] NSWCA 172, confirming Uber’s New South Wales payroll tax liability for the 2015 to 2020 financial years (totalling over $80 million). This decision overturns the New South Wales Supreme Court’s earlier ruling, and serves as a critical checkpoint for businesses engaging contractors – both in the ‘gig’ economy and more broadly.
Key findings
The Court of Appeal has ultimately upheld the Chief Commissioner’s assessment, finding against Uber on all eleven points at issue in the appeal. In summary:
- Relevant contracts: The Court of Appeal confirmed the Supreme Court’s finding that Uber was engaging rideshare drivers under ‘relevant contracts’, on the basis that the services provided under the Driver Contracts were ‘for or in relation to the performance of work’ (for Uber). Of note was the clear finding that the transportation of riders to their destination generated a financial benefit to Uber.
- No exemption applied: The Court of Appeal rejected Uber’s argument that the use of the drivers’ vehicles to perform services fell within the ‘services ancillary to the use of goods’ exemption contained in section 32(2)(a) of the Payroll Tax Act 2007 (NSW).
- Taxable wages: The amounts paid by Uber to its drivers constituted taxable wages for payroll tax purposes, as they were also made for or in relation to the performance of the drivers’ work. This is despite the terms of Uber’s contracts, which deemed amounts paid from riders to Uber (and the on-payment of those amounts from Uber to the drivers, net of a service fee) to be a payment directly to the drivers (confirming the Court’s earlier decision in Optical Superstore)[1].
[1] Commissioner of State Revenue v Optical Superstore Pty Ltd [2018] VSCA 197.
It is expected Uber will seek special leave to appeal to the High Court.
Implications for businesses
This decision largely returns to the status quo for interpreting contractor arrangements. Effectively, this means that in ascertaining their payroll tax liability in respect of relevant contracts (with contractors) businesses should consider the following matters:
- Substance over form: Attempting to contractually classify payments as something other than payments for the performance of work by contractors will not protect businesses from payroll tax where that classification is artificial.
- Relevant contracts: Businesses that engage contractors should review their arrangements, and make sure that they are compliant with their payroll tax liabilities under the ‘relevant contract’ provisions.
- Payroll tax exposure: Businesses should be aware that due to the harmonised payroll tax legislation, a liability in one State or Territory will likely indicate a liability to payroll in other jurisdictions in which the business engages employees or contractors.
Final note
The Uber decision is a timely reminder to re-evaluate your contractor arrangements. You should act now to mitigate your payroll tax risk and ensure compliance.
For tailored advice or assistance reviewing your contractor arrangements, please contact a member of our team.