Revenue Ruling No. PTA 006

Payroll tax exemption for payments to owner-drivers

(Payroll Tax Act 2007)

Ruling history

Ruling no.Issued dateDates of effectStatus
PTA 006 12 July 2007 1 July 2007 - Current


The Payroll Tax Act 2007 (the Act), which commenced on 1 July 2007, rewrites the Pay-roll Tax Act 1971 and harmonises the payroll tax legislation in Victoria and NSW.

The contractor provisions are contained in Division 7 of Part 3 of the Act. Under these provisions, the respective persons under a relevant contract are taken to be employer and employee and payments made under such a contract are taken to be wages for payroll tax purposes.

Although most contracts for the provision for services initially come within the meaning of a relevant contract under section 32 of the Act, there are certain types of contracts that are specifically exempted from the definition of a relevant contract. One of the exemptions provided under section 32(2)(d)(i) exempts a contract under which a person provides services ancillary to the conveyance of goods by means of a vehicle provided by the person conveying them (i.e. contract owner-drivers). The exemption does not apply where the Chief Commissioner of State Revenue determines that the contract was entered into with the intention to avoid payroll tax.

This revenue ruling sets out the conditions which need to be satisfied in order for payments made to owner-drivers to be exempt under section 32(2)(d)(i) of the Act.


Payments made for services performed by a contractor who provides his or her own vehicle, being a motorcycle, car or truck, will be exempt under section 32(2)(d)(i) of the Act if:

  • the vehicle provided by the contractor is not owned or leased by the employer

  • the employer makes no contribution, whether directly or indirectly, to the capital or running expenses of the vehicle and

  • the main purpose of the contractor’s work is the conveyance (i.e. transportation and delivery) of goods. Any other services provided must be in every respect ancillary or secondary to that main purpose. That is, those services must be supplemental or subservient to the main purpose.

Provision of vehicle

To qualify for exemption, it is not necessary that the contractor own the vehicle used for the conveyance of goods. The vehicle may be made available through direct ownership, or through hiring, leasing or borrowing.

Main purpose of the contract

The Office of State Revenue (OSR) is aware that some contract owner-drivers may convey goods for the purpose of installing those goods at the point of destination or for use in connection with repair, maintenance or servicing work at the point of destination. In these types of circumstances, the main purpose of the contract is not the conveyance of goods as such, but rather their installation or use in connection with repair, maintenance or servicing work and accordingly, the exemption under section 32(2)(d)(i) will not apply.


The exemption will generally apply to couriers who use motorcycles, cars or trucks to convey goods. This is subject to all the conditions detailed in this ruling being fully satisfied.

In relation to pushbike couriers, the OSR considers that in most instances such persons are employees of the courier business. Therefore, the exemption cannot apply and all payments made to such persons are subject to payroll tax.

Please note that rulings do not have the force of law. Each decision made by the Office of State Revenue is made on the merits of each individual case having regard to any relevant ruling.

Tony Newbury
Chief Commissioner of State Revenue
12 July 2007

Last updated: 16 April 2015