Payroll tax and the gig economy: Uber seeks High Court appeal
12/09/2025
Uber submits application to appeal the decision in Chief Commissioner of State Revenue v Uber Australia Pty Ltd [2025] NSWCA 172 which confirmed driver payments (2015–2020) were taxable wages, leaving Uber with over $81 million in payroll tax liabilities.
What has happened
On 1 August 2025, the Court of Appeal unanimously held that Uber’s payments to its drivers were subject to NSW payroll tax, reversing an earlier Supreme Court ruling in Uber’s favour.
The Court of Appeal agreed that relevant contracts were established under the driving arrangements as drivers provided driving, referral, and rating services to Uber. The decisive issue was that the payments to drivers were found to be “for or in relation to” the work performed in contrast to the Supreme Court view. While the Court of Appeal considered the “relevant contract” framework and the statutory exclusions under the Payroll Tax Act 2007 (NSW), Uber was largely unsuccessful in substantiating that any exclusion applied.
Uber’s argument that it merely acted as an agent for rider payments was rejected, with the Court noting the driving service is fundamental to Uber’s business, reinforcing the connection between drivers’ work and the payments.
On 29 August 2025, Uber filed its special leave application to challenge the Court of Appeal’s reasoning.
Implications for other companies
This decision fits within a progression of cases in which revenue authorities have tested and broadened the application of payroll tax provisions to contractor models and new industries. The trend has been towards expansive interpretations, particularly the types of payments that can be considered “for or in relation to work”.
If the decision stands, exposure may not be limited to the gig economy which includes rideshare, food delivery, and freelance platforms. Revenue-share arrangements in other sectors such as sales and content platforms, may also be scrutinised. Authorities may additionally question distributions described as “profit,” particularly where amounts can be traced to the performance of work.
How SW can help
Although this is a watch-and-see period, at-risk businesses should begin reviewing contracting arrangements and payment flows for similar exposure. Practical levers include the structure of payment arrangements and the design and implementation of processes, controls, and evidence to substantiate any available exemptions.
Contact SW today to assess the payroll tax risk in your current contracts and payment practices and safeguard your business against potential payroll tax risks. Don’t wait, proactive steps now can save significant costs later.
