High Court Rules Uber Owes $81 Million in NSW Payroll Tax

SYDNEY — The High Court of Australia ruled Wednesday that Uber owes payroll tax in New South Wales, ending a years-long legal fight over whether the fares paid to the company's drivers count as wages. The decision leaves the ride-hailing giant facing a bill of about $81 million and is likely to be watched closely across the gig economy.

By majority, the court dismissed Uber's appeal in full. It found that Uber's drivers were engaged under contracts and that the fares they received are deemed to be wages for the purposes of payroll tax legislation, according to ABC News. Uber must also pay the legal costs of the NSW Chief Commissioner of State Revenue.

The ruling is a tax decision, not a fine. It means Uber is liable for payroll tax that Revenue NSW assessed on payments made to drivers, rather than a penalty imposed for wrongdoing.

What the case was about

The dispute covers payments to drivers in the 2015 to 2020 financial years. Revenue NSW issued Uber six payroll tax assessments totalling about $81.5 million for that period, and also imposed interest on top, according to legal summaries of the case.

Uber argued it was merely a "payment collection agent." Under that argument, the company collected fares from passengers and passed them on to drivers after deducting service fees, so the money should not be treated as wages subject to NSW payroll tax.

The High Court rejected that position. Under the state's Payroll Tax Act, payments made under certain "relevant contracts" for the performance of work can be taxed as wages, even where the worker is not a traditional employee.

A long road through the courts

Uber objected to the assessments in April 2021, and the Chief Commissioner disallowed the objection in August 2022, according to a NSW Supreme Court summary. Uber then took the matter to court.

In September 2024, the NSW Supreme Court sided with Uber and revoked the assessments, finding that payroll tax was not payable on almost all of the payments to drivers.

The Chief Commissioner appealed. In August 2025, a five-judge panel of the NSW Court of Appeal unanimously reversed that decision and found Uber liable. The High Court granted Uber special leave to appeal in late 2025, setting up Wednesday's decision.

Why the gig economy is watching

The decision may reach well beyond Uber. Payroll tax is paid by employers on wages above a threshold, and state revenue offices have in recent years extended their scrutiny to arrangements in which businesses use contractors or act as intermediaries for payments.

Tax advisers warned after the Court of Appeal ruling that the contractor provisions could apply regardless of a company's business model. Other rideshare, delivery and platform-based businesses will now assess how the High Court's reasoning applies to them.

ABC News said the decision is likely to have ramifications for the broader gig economy. The full reasons for the majority's judgment will determine how far the ruling extends, including to other states with similar payroll tax laws.

The NSW Parliament has also been examining how the state's contractor and employment agent provisions work in practice. A parliamentary inquiry held hearings on the issue in 2025.

What it means for drivers

The ruling concerns the payroll tax Uber must pay. The finding that fares are deemed wages applies under payroll tax law, and the reports reviewed for this article do not suggest it changes drivers' pay, conditions or classification under industrial relations law.

In other countries, Uber has argued that drivers value the flexibility of working for themselves. Whether the company will change how it operates in Australia as a result of this decision is not yet clear.

Uber's other legal headaches

The decision comes after a series of regulatory setbacks for Uber overseas. In August, the Dutch data protection authority fined the company €825 million, about US$962 million, over automated suspensions of driver accounts. It was the second-largest penalty ever issued under the European Union's GDPR privacy rules. Uber said it disagreed with the decision and would appeal.

What happens next

Uber had not publicly responded to the High Court decision in the reports reviewed for this article. Because the High Court is Australia's highest court, there is no further avenue of appeal in the matter.

The company will need to pay the assessed tax, any interest and the Chief Commissioner's legal costs. State governments and tax advisers are expected to study the judgment for guidance on how payroll tax applies to platform businesses.