Uber and out: High Court rules on wages for payments for payroll tax

The High Court has handed down its much-anticipated decision in Uber Australia Pty Ltd v Chief Commissioner of State Revenue [2026] HCA 40, dismissing Uber’s appeal and bringing a long-running NSW payroll tax dispute to an end.

What happened?

The case has taken several turns. At first instance, the NSW Supreme Court accepted that Uber’s agreements with drivers were “relevant contracts”. However, the Court found that the amounts Uber remitted to drivers were not paid “for or in relation to the performance of work”, viewing Uber as a payment collection agent that collected fares from riders and passed them on to drivers after deducting its service fee.

That decision was overturned by the NSW Court of Appeal in Chief Commissioner of State Revenue v Uber Australia Pty Ltd [2025] NSWCA 172, which found in favour of Revenue NSW that the amounts remitted to drivers were deemed wages for payroll tax purposes. Uber then subsequently appealed to the High Court with a decision handed down on 4 November 2026.

What did the High Court decide?

The High Court dismissed Uber’s appeal, upholding the NSW Court of Appeal’s decision.

The Court rejected Uber’s argument that it was only a payment collection agent and that the amounts it passed to drivers were therefore outside the payroll tax rules. Instead, the Court found that the payments to drivers were made for or in relation to the work they performed. As a result, those payments are deemed wages under the relevant contract provisions.

The decision confirms that the relevant contract provisions are broad enough to capture modern business models, including platform and gig economy arrangements. It also makes clear that how payments are structured or described will not, on its own, take an arrangement outside the payroll tax net. Where the substance of the arrangement involves contractors supplying services to a business, the payments are likely to be taxable unless a specific exemption applies.

Why does this matter for businesses using contractors?

The significance of the decision extends well beyond rideshare.

The relevant contract provisions are broadly harmonised across most Australian jurisdictions. Businesses relying on contractor workforces, intermediary arrangements or payment collection models should consider how the decision applies to them. This is particularly relevant to:

• gig economy and platform businesses
• financial services and adviser models
• Allied healthcare and veterinary practices (as previously publicised)
• real estate and agency arrangements
• other businesses that facilitate services provided by contractors to customers.

The key takeaway: contractual labels and payment mechanics offer limited protection where the commercial arrangement falls within the relevant contract provisions. With the law now settled at the highest level, re-working contracts is unlikely to be an effective strategy.

Instead, the focus should shift to whether statutory contractor exemptions are available. Depending on the jurisdiction and facts, these can include the 90-day exemption, services required for less than 180 days in a financial year, services provided to the public generally, and arrangements where the contractor engages two or more persons to perform the work. Each exemption has specific requirements and must be supported by evidence.

What should businesses do now?

For many businesses, the challenge is not whether the relevant contract provisions apply, but which contractor payments remain taxable once the exemptions are applied. A practical review should focus on:

1. Identifying contractor populations and payments potentially captured.
2. Testing available exemptions contractor-by-contractor and state-by-state.
3. Using payment, invoice and workforce data to support exemptions such as the 90-day and two-or-more-persons rules.
4. Quantifying exposure, including historical liabilities where relevant.
5. Building processes and controls so exemptions are identified, evidenced and applied consistently going forward.

How Grant Thornton can help

The High Court’s decision highlights that payroll tax can no longer be managed through updating legal contractual terms and conditions and payment structures. Therefore, the emphasis has shifted to utilising knowledge of the specific contractor exemptions and data analytics to best manage contractor exposure. 

Grant Thornton’s Employment Solutions team can help you:

• Undertake detailed exemption testing utilising our data analytics capabilities, to incorporate specific analysis of 90-day and two-or-more-persons rules.
• Quantify historical and prospective exposure and identify opportunities to appropriately manage and reduce payroll tax liabilities.
• Review contractor populations and identify arrangements captured by the relevant contract provisions for payroll tax and broader employment taxes.
• Design practical processes to capture the information needed to support exemptions going forward.

Our data specialists work within our employment solutions technical team working to analyse large contractor populations efficiently, identify patterns and focus testing where the risk sits. Rather than assuming all contractor payments are now taxable, a data-led review helps you arrive at a more accurate and defensible payroll tax position.

Article contributed to by Tim Jolly - Senior Manager - Employment Solutions