High Court: Uber Australia Payroll Tax Liability Confirmed

• Australia's High Court has ruled Uber Australia Pty Ltd is liable for payroll tax on fares remitted to its drivers.
• The decision upholds an assessment of approximately $81 million in payroll tax for the financial years 2015-2020.
• The High Court found that driver contracts were for Uber to supply driving services and that payments constituted "wages" under NSW law.
• This judgment in Uber Australia Pty Ltd v Chief Commissioner of State Revenue [2026] HCA 40 sets a significant precedent for the gig economy.

The High Court's decision in this Uber Australia payroll tax case carries substantial weight for the broader gig economy in Australia.

The High Court of Australia has definitively ruled that Uber Australia Pty Ltd is liable for payroll tax on fares remitted to its drivers, dismissing the company's appeal against a New South Wales Court of Appeal decision. This landmark judgment, delivered in the case of Uber Australia Pty Ltd v Chief Commissioner of State Revenue [2026] HCA 40, confirms the rideshare giant's obligation to pay approximately $81 million in payroll tax. The assessment by the Chief Commissioner of State Revenue covered financial years spanning from June 30, 2015, to June 30, 2020, focusing on amounts Uber collected from riders and subsequently paid to drivers.

The Chief Commissioner had initially characterized the majority of these funds as payments made "for or in relation to the performance of work" under the driver contracts between Uber and its drivers. Uber's objections to these assessments were rejected, leading to a protracted legal battle that has now concluded at the nation's highest court. The decision sets a significant precedent for the classification of rideshare drivers and potentially other gig economy workers for payroll tax purposes in New South Wales.

The dispute began when Uber sought a review of the Chief Commissioner's assessments under section 97 of the Taxation Administration Act 1996 (NSW) before the Supreme Court of New South Wales. Justice Hammerschlag, presiding over the initial review, revoked the assessments. While he determined that the driver contracts constituted "relevant contracts" because drivers provided driving services to Uber—including picking up riders and transporting them—he did not consider the amounts Uber collected and remitted to drivers as "wages" under the Payroll Tax Act 2007 (NSW).

This split decision led to further appeals. The Chief Commissioner challenged Justice Hammerschlag's refusal to classify the payments as wages, while Uber cross-appealed the finding that the driver contracts were "relevant contracts." The New South Wales Court of Appeal subsequently granted the Chief Commissioner's appeal, concluding that the payments did indeed qualify as wages, and simultaneously denied Uber's cross-appeal, affirming the contractual relationship. This set the stage for Uber's final appeal to the High Court.

Before the High Court, Uber maintained its position that it was not responsible for payroll tax on payments to drivers, particularly those amounts received from riders and then passed on. However, a majority of the High Court, comprising Chief Justice Gageler and Justices Gordon, Edelman, Gleeson, Jagot, and Beech-Jones, rejected all of Uber's arguments, with Justice Steward dissenting. They concluded that the driver contract was a mechanism through which Uber supplied the driving services of its drivers via its rideshare system business. The majority further noted that drivers explicitly agreed with Uber to perform specific driving services in accordance with particular standards.

Chief Justice Gageler of the High Court of Australia concurred with the NSW Court of Appeal's findings. He affirmed that the appeal court correctly determined that the "contractor provisions" of the Payroll Tax Act 2007 (NSW) were applicable during the 2015-2020 financial years. This application meant Uber was deemed an employer, thus liable for payroll tax on "wages." These wages were defined as the sums Uber collected from riders under standard-form rider contracts and subsequently paid to drivers under standard-form driver contracts, which the Chief Commissioner attributed directly to the drivers' work performance. Chief Justice Gageler underscored that Uber collected and disbursed these amounts as an integral part of operating its rideshare business.

The High Court's decision in this Uber Australia payroll tax case carries substantial weight for the broader gig economy in Australia. By affirming that the "contractor provisions" of the Payroll Tax Act 2007 (NSW) apply to rideshare drivers, the ruling clarifies the tax obligations of platforms that engage workers under similar contractual arrangements. This interpretation of 'contractor provisions' and 'wages' under the Payroll Tax Act 2007 (NSW) means that companies operating in the gig economy may face increased scrutiny regarding their payroll tax liabilities, particularly in New South Wales.

Lawyers and compliance officers should review their clients' contractor arrangements, especially within the gig economy, to assess potential payroll tax liabilities in light of this High Court's interpretation. The ruling reinforces the principle that even if workers are classified as independent contractors, their engagement can still trigger payroll tax obligations for the engaging entity if the relationship falls within the scope of the relevant legislation. This outcome solidifies the regulatory landscape for gig economy payroll tax Australia, potentially influencing how other states and territories approach similar classifications.

This High Court decision sets a significant precedent for the classification of rideshare drivers and potentially other gig economy workers for payroll tax purposes in New South Wales. Lawyers and compliance officers should review their clients' contractor arrangements, particularly in the gig economy, to assess potential payroll tax liabilities in light of the High Court's interpretation of 'contractor provisions' and 'wages' under the Payroll Tax Act 2007 (NSW).

Source: Original reporting via legal news outlet