Uber Loses Australia High Court Appeal Over Payroll Tax
Australia’s high court has ruled that Uber must pay an $81m payroll tax bill after determining its drivers are employees.
Uber has suffered a major legal defeat in Australia’s high court, resulting in a substantial tax liability that could ultimately surpass $100 million. In a six-to-one decision delivered on Wednesday, the court dismissed an appeal by Uber Australia and ruled that the rideshare company is liable to pay $81 million in unpaid payroll taxes in New South Wales covering the tax years from 2015 through 2020. The final ruling brings an end to the company's legal challenges on the matter.
Six of the seven justices agreed that Uber operates as an employer and that the financial remuneration provided to drivers constitutes wages under state legislation. The majority noted that Uber maintains control over how rideshare transactions are structured. By funnelling payments through its platform, the company holds substantive authority over fares before they reach the drivers, allowing it to deduct service fees or alter fares entirely.
Chief Justice Stephen Gageler observed that state payroll tax laws were updated decades ago to encompass contractual frameworks that might otherwise obscure the genuine nature of working relationships. He noted that these contractor provisions continue to apply directly to participants within the modern gig economy. Legal experts have previously indicated that this judicial outcome will likely set a strong precedent affecting similar tax obligations for gig economy companies across the country.
Australia's high court ruled Uber drivers are employees, leaving the company facing millions in unpaid payroll taxes.
The New South Wales government defended the collection of payroll taxes as a vital component of the state revenue base. State finance minister Courtney Houssos emphasized that the tax proceeds contribute directly to essential community services relied upon by local families and households.
Why it matters
The high court decision means multinational rideshare platforms can no longer claim they are exempt from state payroll taxes by denying an employer-employee relationship with their drivers. This ruling secures critical revenue for public services while establishing clear legal boundaries for gig economy operations.