Your client runs a training business. They use independent contractors to deliver workshops. The contracts say “independent contractor.” The trainers charge GST. Everyone thinks it is clean.
Revenue NSW disagrees. Payroll tax assessed. Three years.
The Case
In Living Works Education (Australia) Pty Ltd v Chief Commissioner of State Revenue [2026] NSWCATAD 80, the Applicant provided suicide intervention training using a “train the trainer” model. Trainers delivered workshops under contractor and service agreements.
Revenue NSW assessed payroll tax for FY2022-FY2024 on the basis the trainers were employees. The Applicant objected. Disallowed. Review sought in NCAT.
The Tribunal had to decide two questions [4]-[5]. First, were the trainers employees? Second, if not, were the contracts “relevant contracts” under s 32 of the Payroll Tax Act 2007 (NSW) - if they were, payroll tax is payable even if the trainers are not employees [114].
Question One - Employees?
No. The Tribunal applied CFMEU v Personnel Contracting [2022] HCA 1 and found the trainers were not employees [109]. The factors (amongst others): trainers could refuse work [83], fees per workshop not per hour [87]-[90], own insurance [91], indemnification of the Applicant [93], and subcontracting was contemplated [101]. Following JMC v Commissioner of Taxation [2023] FCAFC 76, prescribing workshop content did not constitute control [62]-[63].
The assessments could not stand on the employment basis [113].
Question Two - Relevant Contracts?
Yes. The Applicant conceded the contracts were “relevant contracts” under s 32(1) [116]. The question became whether they were taken outside that definition by the 90-day exemption in s 32(2)(b)(iii) [117].
One contractor exceeded 90 days in certain years [122]. The question was whether that contractor provided “similar services” to those under the other contracts - if so, the exemption fails for all of them [124]. No evidence was led. The Applicant did not address whether one contract exceeding 90 days disentitles the whole claim [125]. The Tribunal found the Applicant had not shown the exemption applied [124].
The employment basis was overturned but s 32 provides an alternative basis for the same liability. The amounts were not identifiable on the evidence [129]. The matter was remitted to Revenue NSW for reconsideration [130].
The Practitioner Lesson
The 90-day exemption is not a blanket shield. The “similar services” limb in s 32(2)(b)(iii)(A) means one contractor exceeding 90 days can compromise the position for all contracts. The taxpayer bears the onus. If the evidence is not there, the exemption is lost.
Payroll tax is not binary: employee or not is not sufficient and “relevant contracts” matter. Read s 32. Structure accordingly.
General information only. This note was written as at 23 March 2026 and the law may have changed since. It is not legal or tax advice, does not take account of your circumstances, and must not be relied upon as a substitute for advice on your own matter.