ATO Interpretative Decision

ATO ID 2014/28


Superannuation Guarantee Status of the Worker: Pizza delivery drivers as employees
  • Status of this decision: This interpretative decision is currently being reviewed as a result of recent court decisions. Refer to Decision Impact Statements

    Construction, Forestry, Maritime, Mining and Energy Union v Personnel Contracting Pty Ltd (P5/2021)
    Jamsek v ZG Operations Australia Pty Ltd (No 3) (NSD 332 of 2022)
    JMC Pty Ltd v Commissioner of Taxation (NSD 562 of 2022).

    However, the decision continues to represent the Tax Office view on this issue unless or until it is withdrawn.

CAUTION: This is an edited and summarised record of a Tax Office decision. This record is not published as a form of advice. It is being made available for your inspection to meet FOI requirements, because it may be used by an officer in making another decision.

This ATOID provides you with the following level of protection:

If you reasonably apply this decision in good faith to your own circumstances (which are not materially different from those described in the decision), and the decision is later found to be incorrect you will not be liable to pay any penalty or interest. However, you will be required to pay any underpaid tax (or repay any over-claimed credit, grant or benefit), provided the time limits under the law allow it. If you do intend to apply this decision to your own circumstances, you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed. You may wish to obtain further advice from the Tax Office or from a professional adviser.


Are pizza delivery drivers, who are required to provide and maintain their own motor vehicles in performing their deliveries, employees for the purposes of the Superannuation Guarantee (Administration) Act 1992 (SGAA)?


Yes, pizza delivery drivers are employees, as per the ordinary meaning of that term and in accordance with subsection 12(1) of the SGAA. The fact that the drivers use their own vehicles is not an overriding factor when considering the arrangement as a whole.

Such advice is consistent with the decision in the Administrative Appeals Tribunal matter of Erini Hellen Panagis v. Secretary, Department of Social Security [1997] AATA 66.


An employer operated a pizza delivery franchise business where the delivery drivers were required to provide and maintain their own vehicles.

The drivers were required to sign an 'Independent Contract Driver Agreement' for a fixed rate per delivery and they were provided with a delivery instruction booklet. The drivers were not able to negotiate the per delivery fee.

On the job training was offered to drivers and they were rostered to work in shifts.

The drivers were required to have an Australian Business Number and they issued the employer with weekly invoices which indicated that payment was made on a per delivery basis.

The drivers were not obliged to accept work or to work exclusively for the employer.

Reasons for Decision

The decision in Vabu Pty Limited v. Federal Commissioner of Taxation (1996) 96 ATC 4898; (1996) 33 ATR 537 (Vabu v. FCT) was that some courier drivers who supplied and maintained their own motor vehicles could not be classified, on balance, as employees at common law. In coming to that conclusion, multiple factors (the established approach of taking multiple factors into account to determine employment status was confirmed by the joint judgment of the High Court in Hollis v. Vabu Pty Ltd (2001) 207 CLR 21(Hollis v. Vabu)) were taken into account including:

the cumulative effect of various conditions which gave the company a deal of control over the couriers;
the taxation position of the couriers, who were taxed as independent contractors and not as employees;
the couriers also provided their own street directories, telephone books, trolley, ropes, blankets and tarpaulins;
the couriers received no wage or salary, instead being paid a prescribed rate for the number of successful deliveries they made; and
the relevant arrangement anticipated that the courier may use a business name or corporate name if they so wished, and that a company does not usually have corporations as employees.

It should be recognised that the arrangement involving Vabu (trading as Crisis Couriers) and the couriers was constructed differently to the arrangement involving the employer and the pizza delivery drivers.

In the former case, Vabu's business was essentially an organising role. It arranged for the collection by couriers of various items from clients, and for the delivery of those items to the requested destination. In this regard, Vabu had more of an agency-type or intermediary role between the client and the courier as the service of the courier (delivery of a parcel etcetera) was being provided to a third party.

This differs to the present case involving pizza delivery drivers. Under their arrangement, the service of the driver (delivery of a pizza etcetera) was being provided to the entity engaging the driver; being the pizza delivery franchisee.

Essentially, while the couriers were engaged by Vabu to collect and make deliveries, they were not integrated into Vabu's business. In contrast, in the case at hand, the item (pizza) being delivered represented the core business of the employer.

The joint judgment in Hollis v. Vabu explains at [40]:

These notions later were expressed positively by Windeyer J in Marshall v Whittaker's Building Supply Co. His Honour said that the distinction between an employee and an independent contractor is "rooted fundamentally in the difference between a person who serves his employer in his, the employer's business, and a person who carries on a trade or business of his own". In Northern Sandblasting, McHugh J said:
"... The rationale for excluding liability for independent contractors is that the work which the contractor has agreed to do is not done as the representative of the employer." (footnote references omitted)

With a distinction such as this between the facts and arrangements of the two cases, the provision of motor vehicles by the pizza delivery drivers is not significant enough to prevent them from being considered employees under the ordinary meaning in subsection 12(1) of the SGAA.

It is however acknowledged that where circumstances differ even slightly from one work arrangement to another, it would be expected that different decisions could be reached in relation to employment status. Factors not present in one work arrangement may be taken into account in another, while the criteria present in both work arrangements may be given different degrees of importance.

AAT decision

Support for the view that the pizza delivery drivers are employees in accordance with subsection 12(1) of the SGAA can be found in the decision in the matter of Erini Hellen Panagis v Secretary, Department of Social Security [1997] AATA 66; a decision in which post-dates Vabu v FCT.

That case concerned pizza delivery drivers who provided their own motor vehicles and were responsible for paying all expenses associated with the delivery of the pizza.

Purcell SM at [14] states:

...she perceived of her working relationship as that of a sub-contractor, delivering pizza at a certain price, working when and if she chose, and carrying on a business. She has an honestly and sincerely held belief that she was carrying on a business, but this belief does not change the relationship which I regard as that of a casual employee, into that of a person carrying on a business...

Although that case mainly considered the application of the Social Security Act 1991, there were also income tax consequences and the findings as to employment status are relevant to the current case.


It should be noted that due to the decision and associated reasoning in Vabu v. FCT, pizza delivery drivers who provide their own vehicles do not fall within the extended definition in subsection 12(3) of the SGAA; that is, they are employees by virtue of subsection 12(1) only.

Date of decision:  6 June 2013

Year of income:  Year ended 30 June 2009 Year ended 30 June 2010 Year ended 30 June 2011

Legislative References:
Superannuation Guarantee (Administration) Act 1992
   subsection 12(1)

Case References:
Erini Hellen Panagis v Secretary, Department of Social Security
   [1997] AATA 66

Hollis v Vabu
   (2001) 207 CLR 21

Vabu Pty Ltd v Federal Commissioner of Taxation
   96 ATC 4898
   (1996) 33 ATR 537

Related Public Rulings (including Determinations)
SGR 2005/1

Superannuation guarantee scheme

Siebel/TDMS Reference Number:  1-57N6679; 1-JT71BGC

Business Line:  Superannuation Business Line

Date of publication:  3 October 2014
Date reviewed:  6 November 2019

ISSN: 1445-2782