Payroll Tax and Contractors: What the Uber Case Means for Your Business
A landmark decision from the NSW Court of Appeal has sent shock waves through the business community.
On 1 August 2025, the court ruled that Uber Australia is liable for $81 million in payroll tax on payments made to its drivers—redefining how contractor relationships are viewed under payroll tax law.
If your business engages contractors, especially in industries like transport, healthcare, or professional services, this case could have serious implications.
The Uber Decision: A Quick Summary
The court found that Uber’s drivers were engaged under “relevant contracts”,a key concept in payroll tax law. That means:
- The services drivers provided were “for or in relation to the performance of work”.
- Payments made to drivers were deemed taxable wages under the Payroll Tax Act 2007 (NSW).
- No exemptions applied, despite Uber’s argument that it was merely a payment collection agent.
This decision overturned a previous ruling in Uber’s favour and aligns with earlier cases involving medical centres and mortgage aggregators.
Why This Matters
The Uber case sets a precedent that could affect thousands of businesses. Here’s what it means for you:
- Retrospective liability: Payroll tax can be assessed up to five years, creating significant financial risk.
- Gig economy scrutiny: Businesses using flexible or on-demand contractors may face increased audits.
- Medical and professional services: Practices that channel payments through a central entity (e.g. clinics or aggregators) are especially vulnerable.
What You Should Do Now
If you engage contractors, now’s the time to review your arrangements:
- Map out contractor relationships: Who are you paying, and under what terms?
- Assess payroll tax exposure: Are payments potentially deemed wages?
- Document exclusions: If you believe an exemption applies, ensure it’s well-supported.
- Seek advice: The rules are complex, and each case depends on its facts.
How Macro Group Can Help
We help businesses navigate payroll tax compliance with clarity and confidence. Whether you’re unsure about a contractor arrangement or want to prepare for an audit, we’re here to support you.
If you’d like to talk through your contractor setup, reach out to the Macro team.
Date: 09/09/2025
The Macro Group Limited AFSL:485843 Tax Agent Number 24 76 5236.
The information in this article contains general information only. We have not taken into consideration any of your personal objectives, financial situation or needs. Before taking any action, you should consider whether the general advice contained in this communication is appropriate to you having regard to your circumstances and needs, and seek appropriate professional advice if you think you need it. We recommend that you consult a licensed or authorised financial adviser if you require financial advice that takes into account your personal circumstances.