Australia's High Court Rules Uber Owes A$81 Million in NSW Payroll Tax

Australia's High Court has ruled that Uber owes A$81 million in payroll tax in New South Wales for the tax years from 2015 to 2020. The company's total bill could rise above A$100 million if it is assessed for later years.

In a six-to-one decision on Wednesday, the court dismissed Uber's appeal against an assessment by the NSW chief commissioner of state revenue. Uber had argued that it did not employ its drivers and that its payments to them did not count as wages under state law. The majority found that the payments were wages for payroll tax purposes. Uber had initially succeeded in challenging the assessment, but the ruling ends its legal challenge.

In explaining their decision, the majority pointed to Uber's control over fares. Passenger payments pass through the company before reaching drivers, which allows Uber to deduct its service fee, adjust the amount or cancel the fare altogether.

Chief Justice Stephen Gageler noted that several Australian states had amended their payroll tax laws in the late 20th century to cover contracting arrangements that could disguise the true nature of a working relationship. He said those provisions continue to apply to businesses operating in the gig economy.

Legal expert Celeste Black wrote last year that the case was likely to influence the payroll tax obligations of companies that use gig workers across Australia.

The NSW government said payroll tax is an important source of state revenue, even though only about one in 20 companies meets the threshold to pay it. NSW Finance Minister Courtney Houssos said the tax helps fund essential services that households rely on. "Local businesses pay their fair share. Uber should pay their fair share too," she said.