Payroll Tax and Uber

What It Means for Medical Practices.

In August 2025, the NSW Court of Appeal delivered an essential decision in Chief Commissioner of State Revenue v Uber Australia Pty Ltd [2025] NSWCA 172, ruling that Uber was liable for payroll tax on payments made to its drivers.

The Court concluded that drivers provided services to Uber under a contractual arrangement, and that the amounts paid to them were “for or in relation to the performance of work”. This meant the payments were caught by the “relevant contract” provisions of the Payroll Tax Act 2007 (NSW) and treated as wages.

While the case centred on rideshare drivers, its logic has broader application. It reinforces a principle already seen in Thomas and Naaz: payroll tax can apply even where workers are independent contractors, if the structure resembles an employment-like arrangement in substance.

Why does this matter for medical practices?

Many medical practices operate under a service entity model, where:

• The doctor contracts with a service entity (sometimes in addition to directly with the patient),

• The service entity collects patient fees,

• A service or administration fee is deducted, and the balance is remitted to the doctor.

There may be cases where this structure is appropriate, when well-thought-out and with sound legal and accounting advice.

However, ill‑thought‑out arrangements, particularly where the service entity plays a central role in the delivery of patient care or controls how doctors provide their services, may attract attention under the same payroll tax rules applied in the Uber case.

The Court found that Uber’s business model depended on the drivers’ work, and that the benefit Uber received, along with the contractual control, was enough to make it liable for payroll tax. For medical centres, similar risks can arise if the administrative entity is seen as receiving and benefiting from doctors’ services.

What practices should do now?

1. Review your contracts

Focus on whether the contracts reflect the genuine independence of practitioners or suggest control by the service entity.

2. Check your payment flow

Are patient fees paid to the doctor directly? Or does the entity collect and distribute funds after deducting a fee?

3. Seek proactive advice

Don’t wait for a payroll tax review. A quick check now could prevent costly surprises later.

This decision doesn’t mean all contractor arrangements are problematic, only that structure matters. A well-designed model, clearly separating administrative services from clinical services, can reduce risk significantly.

Key takeaway:

The Uber decision is a reminder that substance overrides form. If your structure has evolved without advice or hasn’t been reviewed in light of recent rulings, now is a good time to take stock.