Australia: Payments to drivers by ridesharing company are wages subject to payroll tax (NSW Court of Appeal decision)
“Relevant contract” for purposes of Payroll Tax Act 2007 (NSW) was determined to exist.
The New South Wales (NSW) Court of Appeal on August 1, 2025, overturned an earlier decision of the NSW Supreme Court (read TaxNewsFlash) and held that the taxpayer, a ridesharing company, is liable for payroll tax on payments made to its drivers and partners between 2015 and 2020.
The case is: Uber Australia Pty Ltd v Chief Commissioner of State Revenue (2024) NSWSC 1124
The decision reinforces that the Payroll Tax Act 2007 (NSW) can be applied to platform-based work arrangements when a "relevant contract" is determined to exist.
KPMG observation
The decision significantly narrows the scope for gig economy platforms and other contractor-based businesses to argue that they are not liable for payroll tax under the contractor provisions of the Payroll Tax Act 2007 (NSW). The court's rejection of the "mere payment agent" argument and its endorsement of a broader interpretation of "paid or payable" and "for or in relation to" under section 35(1) will likely influence future disputes involving tripartite arrangements, including those between mortgage aggregators and brokers, and other service platforms.
For more information, contact a KPMG tax professional in Australia:
Priscilla Tang | ptang@kpmg.com.au
Andrew Larmour | alarmour@kpmg.com.au
David Sofra | davidsofra@kpmg.com.au
Bryce Miller | bmiller6@kpmg.com.au