On a ride to the High Court: Uber's $81 million payroll tax dispute receives special leave

The High Court will consider the contractor provisions for payroll tax purposes following the landmark NSW Court of Appeal judgment handed down on 1 August 2025.

The NSW Court of Appeal found in favour of the Chief Commissioner, where the court concluded that payroll tax was payable on rideshare driver payments.

On 4 December 2025, the High Court of Australia granted Uber's request for special leave to appeal this decision. The Court of Appeal's construction of the contractor provisions contained in Division 7 of Part 3 of the Payroll Tax Act 2007 (NSW) should be central to the impending High Court litigation.

Revenue authorities have been undertaking compliance reviews under both the contractor and employment agent provisions (Divisions 7 and 8 of Part 3 of the Payroll Tax Act 2007 (NSW) respectively). Similar to the contractor provisions, the employment agency provisions can apply to deem that an employment agent is a putative "employer" of a contractor and is therefore liable to payroll tax.

Broader context of the Uber dispute

The contractor and employment agent provisions have been the subject of extensive litigation in recent years. For instance in late October 2025, the NSW Supreme Court heard a challenge by Finsure to payroll tax assessments issued by Revenue NSW that applied the contractor provisions to Finsure's arrangements with mortgage brokers.

Other recent cases include:

• Loan Market Group Pty Ltd & Anor v Chief Commissioner of State Revenue [2024] NSWSC 390 – contracts between the Loan Market Group and mortgage brokers to supply mortgage aggregation services were held to be relevant contracts;

• Chief Commissioner of State Revenue v Integrated Trolley Management Pty Ltd [2023] NSWCA 302 – contracts between Integrated Trolley Management and various supermarkets to supply trolley collection services were held to be employment agency contracts;

• Chief Commissioner of State Revenue v E Group Security Pty Ltd [2022] NSWCA 259 – contracts between a security company and clients to supply security guarding services were held to be employment agency contracts; and

• SKG Cleaning Services Pty Ltd v Chief Commissioner of State Revenue; Ezko Property Services (Aust) Pty Ltd atf The Ezko Unit Trust v Chief Commissioner of State Revenue [2025] NSWSC 1219 – contracts between two cleaning companies and various retail, commercial, and government clients to supply cleaning services were held to be employment agency contracts.

The volume of payroll tax cases highlights the uncertainty in this area and reflects the increasingly strict approach to payroll tax compliance by tax regulators. Recent outcomes have, on balance, been unfavourable for taxpayers. It remains to be seen in Uber's appeal to the High Court whether this trend will continue.

The NSW Parliament also continues its inquiry into the application of the contractor and employment agent provisions contained in Divisions 7 and 8 of Part 3 of the Payroll Tax Act 2007 (NSW). It has received a number of submissions and held a preliminary hearing on 21 March 2025, with a further hearing scheduled for 16 December 2025. It is too premature to anticipate what findings the Parliamentary inquiry committee may make, including whether legislative reform can be ultimately expected. However, it is clear that the breadth and application of these provisions are controversial at the tax regulator, judicial and legislative levels.

Implications for businesses

State and Territory revenue authorities are continuing to closely scrutinise and review payroll tax compliance, particularly for prospective contractor and employment agent relationships. This trend is particularly prevalent in the on-demand service provider and gig-economy industries, however it extends to all industries that engage contractors.

Businesses who engage contractors should proactively review their arrangements and monitor developments in case law to identify any risk to their business. In the event of regulator inquiry, or should any risk present, we recommend seeking professional advice and consider early engagement with revenue authorities so as to limit potential penalty and interest exposure.