High Court Uber decision: What does it mean for payroll tax and the gig economy?

The High Court has dismissed Uber Australia's appeal over an $81 million NSW payroll tax liability, in a significant decision for businesses using contractors, platforms and intermediary operating models that are largely present in the gig economy. (Source: ABC)

On 4 November 2026, the High Court handed down its decision in Uber Australia Pty Ltd v Chief Commissioner of State Revenue [2026] HCA 40, dismissing Uber's appeal against the application of the contractor provisions in the Payroll Tax Act 2007 (NSW). (Source: High Court of Australia)

The case concerned amounts Uber collected from riders and remitted to drivers during the 2015 to 2020 financial years. The Court concluded that Uber's Driver Contracts were "relevant contracts" for payroll tax purposes and that the relevant payments to drivers were deemed to be wages. (Source: High Court of Australia)

While the decision turns on Uber's particular arrangements and NSW legislation, the reasoning has potentially wider implications for platform businesses, intermediaries and other organisations engaging contractors, and the gig economy more broadly.

Not to mention the additional liabilities that will likely arise for Uber in all states and territories that are likely to issue assessments and follow suit (with the exception of Western Australia that do not have relevant contract provision)

A service can have more than one recipient

One of the most significant aspects of the judgment was the Court's consideration of who received the driver's service.

Uber argued that drivers provided transportation services to riders, rather than to Uber. The High Court found, however, that a service can be provided to the person receiving its physical benefit while simultaneously being supplied to another party under a contractual obligation. (Source: High Court of Australia)

Gageler CJ explained that a work-related service can be provided to a person to whom the provider has a contractual obligation to provide the service while simultaneously being provided to another person who receives the physical benefit of that service.

This is potentially important for businesses operating through platforms, marketplaces, agency arrangements and other intermediary structures. The fact that an end customer receives the direct benefit of a contractor's work does not necessarily mean the service is supplied only to that customer for payroll tax purposes.

No obligation to accept work was not fatal

Uber drivers were under no obligation to accept individual trip requests. However, once a driver picked up a rider, the driver contract obliged the driver to transport the rider to their specified destination. The Court considered that it was plainly in Uber's commercial interests to ensure a transportation service, once commenced, was completed. (Source: High Court of Australia) This distinction may be important for other contractor models and provides an important reminder that businesses should not focus solely on whether contractors have the ability to accept or reject work. The obligations that arise once work is accepted may be equally, if not more, important.

For businesses undertaking payroll tax reviews, the contractual analysis should therefore extend beyond headline features such as whether workers are described as independent contractors or can choose when to work.

Payment arrangements were also crucial

Uber argued that it was effectively acting as a payment collection agent, collecting fares from riders before deducting its service fee and remitting the balance to drivers.

However, the High Court found the relevant remitted amounts were sufficiently connected with the driver's performance of work to be deemed wages under the payroll tax provisions.

This is particularly relevant for marketplace and intermediary models where customer payments pass through the platform before ultimately reaching the person performing the service.

An "always speaking" provision

The most interesting broader observation came from Chief Justice Stephen Gageler. The NSW contractor provisions pre-date the modern gig economy, however, Gageler CJ said their broad language and purpose meant their application could evolve over time, describing the provisions as continuing "always speaking in the present" to participants in the gig economy.

It is an important reminder that the emergence of new technology or business models does not necessarily put those arrangements beyond the reach of existing tax legislation.

What should businesses do?

The decision does not mean that every contractor or platform arrangement will attract payroll tax. The application of the contractor provisions remains dependent on the legislation in the relevant jurisdiction and the particular contractual and commercial arrangements.

However, businesses should consider reviewing their arrangements where:

• Contractors provide services directly to customers but also owe contractual obligations to the business
• Contractors can choose whether to accept work but become subject to specific obligations once they do
• The business sets requirements for how accepted work is performed
• Customer payments are collected and subsequently remitted to contractors
• The business relies on one of the specific contractor exemptions.

For platform and intermediary businesses in particular, the decision reinforces the importance of looking beyond contractual labels and examining how the entire arrangement operates in practice.

How BDO can help

The High Court's decision provides an opportunity for businesses to revisit the payroll tax treatment of contractor and intermediary arrangements.

BDO's global expatriate and employment tax team can assist businesses to review contractual arrangements and payment flows, assess the application of the payroll tax contractor provisions and available exemptions, and consider potential historical and prospective payroll tax exposure.

If your business engages contractors or operates a platform or intermediary model, contact your local BDO tax adviser about what the decision could mean for your arrangements.