Australia High Court Rules Uber Liable for $81m Payroll Tax Bill

Sydney – Australia’s high court has delivered a decisive ruling against the rideshare giant Uber, ordering the company to pay $81 million in unpaid payroll taxes for the period between 2015 and 2020. The decision, announced on Wednesday, marks the end of Uber’s legal challenge regarding its tax obligations in New South Wales, where the state revenue authority had initially assessed the liability. The court dismissed Uber’s appeal by a six-to-one majority, rejecting the company’s central argument that it does not employ drivers and that payments made to them do not constitute wages under state law.

In its defense, Uber had contended that its business model relied on independent contractors rather than employees, thereby exempting it from payroll tax liabilities. However, the majority of the justices found that the company exercises substantive control over the fares collected from riders. According to the judgment, Uber structures its system so that payments are funneled through the platform, allowing the company to deduct service fees or alter fares before remitting money to drivers. This level of control was deemed sufficient to classify drivers as employees for tax purposes.

Chief Justice Stephen Gageler highlighted that payroll tax laws in multiple Australian states were adjusted in the late twentieth century to capture revenue from contractual arrangements designed to disguise the true nature of working relationships. He noted that contractor provisions continue to apply to participants in the gig economy, which emerged in the current century. The ruling is expected to impose significant financial burdens on Uber for subsequent years, with total liabilities likely exceeding $100 million.

The NSW government welcomed the decision, emphasizing the importance of payroll tax to the state’s revenue base. Finance Minister Courtney Houssos stated that the tax helps fund essential services relied upon by families and households. He asserted that local businesses pay their fair share and argued that Uber should be held to the same standard. Although only about one in twenty companies meets the threshold to pay this tax, the government views it as a critical component of funding public services.

This case follows earlier assessments by the NSW chief commissioner of state revenue, which Uber initially appealed successfully at lower levels. However, the high court’s final verdict closes all remaining legal avenues for the company. Legal experts, including Celeste Black, have previously indicated that such rulings could influence payroll tax obligations for other companies employing gig workers across Australia. The decision underscores the ongoing scrutiny of labor classifications in the digital economy and sets a precedent for how platforms are taxed when they exert control over worker compensation.

This report was produced in the Europe Brief News newsroom.