Australia High Court Orders Uber to Pay $81 Million in Unpaid Payroll Taxes

The High Court of Australia ruled on Wednesday that Uber must pay $81 million in unpaid payroll taxes for the period between 2015 and 2020. The decision confirms that the rideshare company is liable for these state taxes in New South Wales because its drivers are legally considered employees rather than independent contractors.

The court dismissed Uber’s final appeal in a six-to-one decision. The company had argued that it did not employ its drivers and that the money paid to them did not constitute wages under state law. By rejecting these claims, the justices closed the legal avenues available to Uber regarding the specific tax assessments for those years.

The judgment notes that Uber structures its business so that payments from riders flow through the company first. This setup gives Uber substantive control over fares before they reach drivers, allowing the platform to deduct service fees or alter and cancel fares entirely. Chief Justice Stephen Gageler wrote that payroll tax laws were adjusted in the late 20th century to capture revenue from contractual arrangements that disguise the true nature of the working relationship.

Gageler observed that these contractor provisions continue to apply to participants in the gig economy that emerged in the current century. The ruling is expected to influence the payroll tax obligations of other companies with gig workers across Australia. Legal expert Celeste Black noted last year that the case would likely have this broad impact.

The ruling also suggests that Uber’s total tax bill will exceed $100 million once subsequent years are calculated. While the current judgment covers the 2015 to 2020 tax years, the liability for later periods is expected to add a substantial amount to the company's financial obligations in the state.

New South Wales Finance Minister Courtney Houssos stated on Wednesday that payroll tax is a key part of the state’s tax base. Although only about one in 20 companies meets the threshold to pay it, the minister emphasized that it helps fund essential services for families and households. Houssos added that local businesses pay their fair share and that Uber should do the same.

The decision stands as the final word on the company’s appeal against the assessment by the NSW chief commissioner of state revenue. Uber had previously won an appeal against the initial assessment, but the High Court’s majority view reversed that outcome, solidifying the drivers' status as employees for tax purposes.