Date: 10 November 2026
A recent High Court decision involving Uber has attracted plenty of attention, not least because of the size of the bill: approximately $81 million in NSW payroll tax.
But the importance of the decision goes much further than Uber.
For business owners, the case raises an increasingly important question: when a business describes itself as simply providing a technology platform that connects customers with independent contractors, is that really all it is doing?
It also serves as another reminder that calling someone a “contractor” does not necessarily mean payments made to them fall outside payroll tax and potentially other employment-related obligations.
What happened?
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.
The dispute concerned approximately $81 million of NSW payroll tax assessments relating to fares remitted by Uber to drivers during the 2015 to 2020 financial years.
Uber’s business model involves connecting riders and drivers through its technology platform. Riders pay their fares through Uber, Uber deducts its service fee and then remits the balance to the driver.
Uber’s position was essentially that it provided technology and payment collection services. The drivers were independent transport providers who provided the actual transportation service to riders.
By a 6:1 majority, the High Court rejected Uber’s appeal.
The Court concluded that the arrangements between Uber and its drivers were captured by the NSW payroll tax provisions concerning “relevant contracts”, and that amounts remitted to the drivers were deemed to be wages for payroll tax purposes.
That distinction is important. The Court was not simply declaring Uber drivers to be employees. Instead, NSW payroll tax legislation contains provisions that can extend beyond conventional employer and employee relationships and treat certain payments to contractors as wages.
Is Uber really just providing technology?
One of the most interesting aspects of the decision is what it says about how we describe modern platform businesses.
Uber might be described as a technology business that provides software connecting an independent driver with a customer.
But what service is the customer really buying?
From the customer’s perspective, they are generally not buying access to software. They are buying a ride.
The High Court looked beyond simply describing Uber as an intermediary. While the passenger physically receives the transportation service, the Court found that drivers also supplied services to Uber under their contractual arrangements.
Among other things, drivers had contractual obligations concerning how services were performed, including requirements relating to service quality, safety, licensing, insurance and vehicle standards. Uber also had the ability to restrict or deactivate access to its platform.
The decision therefore raises an important question for other technology-enabled businesses: are you genuinely just providing a platform, or are the people using that platform actually providing part of the underlying service your business offers to its customers?
Employee versus contractor: the label isn’t everything
This case should not be interpreted as meaning everyone working through a digital platform is now an employee.
It does, however, reinforce a broader principle that businesses should be familiar with: legal and tax obligations do not necessarily depend on the label attached to a relationship.
A contract can say someone is an “independent contractor”, but that does not automatically determine every tax or employment consequence.
Payroll tax is a particularly good example. NSW legislation can treat certain payments to contractors as wages even where those contractors are genuinely independent businesses.
For businesses that regularly use contractors, particularly where those contractors perform an important part of the service provided to customers, the distinction deserves careful attention.
Could the implications extend beyond payroll tax?
The High Court case concerned NSW payroll tax, so care needs to be taken not to treat the decision as deciding other issues.
Nevertheless, the underlying questions are relevant much more broadly.
Different legislation applies different tests to employment and contractor relationships. Depending upon the circumstances, businesses using contractors may therefore also need to consider matters such as:
- superannuation guarantee, where some contractors can be treated as employees for superannuation purposes;
- workers compensation, where legislation can extend coverage or premium obligations beyond conventional employees;
- PAYG withholding;
- Fair Work obligations and employment entitlements; and
- payroll tax obligations in other Australian jurisdictions (each State has its own rules).
The tests are not identical, so being liable under one regime does not automatically mean a business is liable under another. But the Uber decision provides a good reason to review these arrangements rather than assuming that an independent contractor agreement settles the question.
What should business owners do now?
For most businesses, there is no reason to panic.
The decision does not make every contractor payment subject to payroll tax and it does not abolish the distinction between employees and contractors. Existing payroll tax exemptions can also apply to particular contractor arrangements.
However, businesses should consider reviewing arrangements where:
- contractors perform work that is central to the service the business sells to customers;
- the business sets standards or rules governing how contractors perform that work;
- a technology platform sits between the customer and the person actually performing the service;
- the business has a significant number of individual contractors performing similar work; or
- the business has historically assumed that payments are outside payroll tax simply because the recipients have ABNs and issue invoices.
The key lesson from the Uber decision is therefore not that “contractors are employees.”
It is that the legal relationship between a business and the people performing work for it may be more complicated than the description written into the contract.
As technology platforms continue to blur the traditional boundaries between businesses, workers and customers, regulators and courts are increasingly having to determine what these arrangements actually involve.
For business owners, that makes it more important than ever to look at how the relationship works in practice, rather than simply what everyone involved has agreed to call it.
Be critical and be honest – its best to err on the side of caution.
Contact your R+M advisor if you’d like to discuss further.
