Control over the cleaners wasn't the deciding factor for the tax bill
Outsourcing your cleaning won't automatically take those workers off your payroll tax base. That's the message from a new New South Wales ruling.
On June 30, 2026, the NSW Court of Appeal dismissed an appeal by two cleaning company groups - the SKG and Ezko businesses - that had been assessed for payroll tax on the subcontractors they used to clean client sites across the state.
The mechanism matters, so start there. Under section 37 of the Payroll Tax Act 2007 (NSW), some arrangements count as "employment agency contracts" - deals where one business supplies another with people to do work. When a contract fits, the law treats those workers as employees of the supplier, and the supplier pays payroll tax on what they are paid.
The cleaning companies argued their contracts sat outside the rule. Their contracts, they said, only spelled out what cleaning had to be done and when - not who did it or how. No real control over the workers, so no deemed employment.
The court didn't accept that. Control over how the work gets done, it held, is not the deciding factor. The real question is whether the services are provided "in and for" the client's business - whether the work is the kind a business would normally have its own staff do. Regular, continuous cleaning of business premises fits. Cleaning a workplace, the court noted, is "typically part of the ordinary activities of that business."
There is a narrow...
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