Cleaning, security provider owes $15m in payroll tax, tribunal says

A cleaning and security provider working out of Sydney Airport failed to reverse a finding that it owes more than $15 million in payroll tax.

The NSW Civil and Administrative Tribunal (NCAT) affirmed a decision of the chief commissioner of State Revenue that Chief Group Services is liable for approximately $15,736,700 in payroll tax for the financial years ending 30 June 2020 to 30 June 2023.

During Revenue NSW’s audit period, Chief Group Services provided airline security and static guard monitoring services to both Delta Air Lines and United Airlines at Sydney International Airport.

Chief National Cleaning, grouped with Chief Group Services for payroll tax purposes, had up to 20 staff providing cleaning and detailing services to Avis and Europcar, also based out of Sydney Airport.

Revenue NSW determined that approximately $8,532,600 was paid to Chief Group Services between 2020 and 2023 under an employment agency tax and was liable for payroll tax. This was also the case for the $6,409,000 to Chief National Cleaning between 2022 and 2023.

Payroll reconciliations for the 2020 and 2023 financial years were then assessed, with Revenue NSW determining that an additional payroll tax was payable in the approximate sum of $884,700, inclusive of amounts already paid, primary tax, 25 per cent penalty and market interest rates.

Chief Group Services objected to the assessments, arguing the chief commissioner wrongly determined the arrangements between itself and its clients were employment contracts under the Payroll Tax Act 2007.

The critical issue before NCAT was the direction and control of Chief Group Services and Chief National Cleaning workers, the nature of the work undertaken under the contractual arrangements between the companies and the airline clients, and the application of legal principles.

Senior member Jan Redfern PSM was not satisfied that the companies had satisfied their onus of proving the contracts were not employment agency contracts for the purposes of section 37 of the act.

Referring to the Delta and United services, Redfern accepted that Chief Group Services had its own insurance and offices or operational areas within the airport, conducted its business as an independent contractor, maintained its own financial records, and was required to comply with other corporate governance and regulatory requirements.

However, Redfern said these matters were not “determinative”, and while the concept of “independence” of a subcontractor’s business from the client’s business is inherent in an employment agency arrangement, it “cannot be the basis for denying its existence”.

“The relevant inquiry is to identify the work to be done by the subcontractor and the nature and ordinary conduct of the client’s business. If there is a close relationship between those two matters, the contract may properly be characterised as an employment agency contract for the purposes of section 37 of the PTA,” Redfern said.

In this case, Redfern was satisfied that there was “a very close connection” between the work that Chief Group Services staff provided under the contracts and the ordinary conduct of the clients’ businesses.

Further, there was evidence that United and Delta maintain close supervision and control of the nature of the work to be provided, the work is undertaken within operational areas of United and Delta, and the work is provided on a regular and continuing basis.

As for Avis and Europcar, Redfern found Chief National Cleaning’s services “are fundamental and closely related to the nature and ordinary conduct of the Avis and Europcar rental businesses”.

This not only goes for the cleaning and detailing of rental cars, but also the services of the collection of rental cars for hire. Redfern said these are also closely related to the nature and ordinary conduct of Avis and Europcar.

Citation: Chief Group Services Pty Ltd v Chief Commissioner of State Revenue [2026] NSWCATAD 299.

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