Uber Payroll Tax High Court: $81m Bill Upheld as Driver Fares Are Deemed Wages

What the High Court decided

The High Court decided that Uber is liable to pay NSW payroll tax on the fares it collects from riders and pays on to drivers. According to the court's judgment summary, the Chief Commissioner of State Revenue assessed Uber on the basis that most of the remitted fares were amounts paid for or in relation to the performance of work under a relevant contract. The primary judge, Hammerschlag CJ in Eq, revoked the assessments in 2024; a five-judge Court of Appeal reversed him in 2025; and the High Court has now restored the Commissioner's position for good.

Chief Justice Gageler wrote separately, agreeing with a joint judgment of Gordon, Edelman, Gleeson, Jagot and Beech-Jones JJ. Steward J dissented and would have allowed the appeal. Ashurst Australia instructed counsel for Uber, and the Crown Solicitor for NSW acted for the Commissioner.

Stage	Outcome
Assessments	About $81m of payroll tax for the years ending 30 June 2015 to 30 June 2020; Uber's objections disallowed
Supreme Court of NSW (2024)	Driver Contracts were relevant contracts, but remitted fares were not deemed wages; assessments revoked
Court of Appeal (2025)	Commissioner's appeal allowed; Uber's cross-appeal dismissed
High Court hearing	8 April 2026
High Court judgment	4 November 2026: appeal dismissed with costs, six to one

Why the remitted fares count as wages

The fares count as wages because the Payroll Tax Act 2007 (NSW) deems them to be, not because they are wages in the ordinary sense. Section 32 treats a contract as a "relevant contract" where a business has supplied to it "the services of persons for or in relation to the performance of work", and section 35(1) then deems amounts paid under it for that work to be wages. As the Chief Justice put it, these contractor provisions have continued "always speaking in the present" to participants in the gig economy.

Uber ran three arguments and lost each one:

• The services were supplied to riders, not Uber. The majority held that under the Driver Contract the driver agrees with Uber to supply driving services to particular standards, so Uber itself has the services supplied to it.
• Driving is ancillary to the use of the car. The exclusion in section 32(2)(a) did not apply. The court said the primary object of the contract is the driving, not the car, and contrasted a car-sharing service.
• Uber only collected money as the drivers' agent. The majority found Uber is not a mere "limited payment collection agent". It noted that Uber has structured its business so payments from riders are "funnelled through it", giving it control to deduct its service fee, or to change or cancel a fare.

The court also gave little weight to labels. The Driver Contract described drivers as "independent" providers and said it created no employment relationship, but the majority repeated that the legal character of an arrangement turns on the rights the contract actually creates.

What the ruling does not decide

The ruling does not decide that Uber drivers are employees at common law or for employment law purposes. Some early reports said the court found drivers were employees; the judgment instead applies a statutory deeming rule, under which the business receiving services is "taken to be" an employer and the worker "taken to be" an employee for payroll tax purposes only. Employment rights, superannuation and income tax status each turn on their own tests.

That distinction matters for cross-border groups, because the same driver can sit in different categories in different regimes. In the UK, for example, the Supreme Court's 2021 decision on Uber drivers concerned "worker" status for employment rights, and commentators at the time flagged the mismatch between employment and tax status. The High Court majority even borrowed the UK court's description of a driver's right to negotiate a lower fare as a "notional freedom" of no possible benefit to drivers. Yet the Australian case runs the other way on outcome: a tax liability without an employment finding.

Steward J's dissent shows how contestable the reasoning is. He began by saying he "very much" regretted being unable to agree, and stressed that payroll tax is a tax upon wages and the emoluments of employment; he would have upheld Uber's first two grounds.

How NSW payroll tax applies to contractor payments

NSW payroll tax is charged at 5.45% on taxable wages above an annual tax-free threshold of $1.2 million, according to Revenue NSW. Under the contractor provisions, payments to a contractor engaged under a relevant contract are taxable unless an exemption applies, and only the labour component counts. Revenue NSW's contractor guidance lists seven exemptions; if any one applies, all payments to that contractor are exempt.

Item	NSW position
Rate	5.45% of taxable wages above the threshold
Annual tax-free threshold	$1,200,000 for 2026 to 2027 and each of the four years before
Who is deemed the employer	The business to which services are supplied under a relevant contract
What is taxed	The labour component; materials, tools, equipment, a vehicle and GST are excluded
Seven contractor exemptions	Services ancillary to the supply of goods; services not ordinarily required; services required for 180 days or less; services provided for 90 days or less; services provided to the public; services performed by two or more people; owner drivers

Uber's case shows that the ancillary-to-goods exemption is narrow where the labour is the point of the contract. Businesses that rely on the other exemptions need evidence for each contractor, year by year, rather than a general assumption that contractors fall outside the tax.

Which businesses could be exposed beyond rideshare

Any business that sits between customers and the people doing the work, collects the money and pays it on, now has a clearer test to apply. Uber said in a statement reported by ABC News that the decision could have "significant unintended consequences beyond rideshare", naming mortgage brokers, service-based marketplaces, medical practices and other healthcare services, and called on state governments to modernise payroll tax laws.

Healthcare is not a hypothetical. The Chief Justice relied on earlier appellate decisions that applied the same provisions to a medical centre's payments to doctors and to an optical business's payments to optometrists. The NSW contractor provisions were modelled on Victoria's, and the 2007 Act was passed in part to harmonise payroll tax law with Victoria, so revenue offices in other states are likely to read the judgment as support for their own assessments.

The money at stake may also grow. The Guardian reported that the ruling is likely to leave Uber with a further bill for later years, pushing the total well over $100 million. The NSW Minister for Finance welcomed the ruling, saying it confirms the Chief Commissioner's interpretation of the law and that "Uber should pay their fair share too".

What platforms, CFOs and in-house counsel should do now

The practical message of the Uber payroll tax High Court decision is to test contractor payments against the statute, not the contract labels. Groups with Australian operations should consider:

• Map the money. Where customer payments run through the business before reaching the worker, and the business can deduct fees or adjust prices, the agency argument is weaker after this judgment.
• Read the obligations, not the labels. Standards imposed on how the work is done point towards services being supplied to the platform.
• Document exemptions. Keep contractor-by-contractor evidence for any exemption claimed, and separate labour from non-labour components.
• Assess back years and provisions. The Uber assessments covered six financial years, so exposure can be historic as well as current.
• Look at deal risk. Buyers of platform businesses should price payroll tax exposure in due diligence and in the tax indemnity, whatever the structure of the share or asset sale.

Employment status remains a separate exercise. UK groups are already reviewing workforce models under the Employment Rights Act 2025 and absorbing the employer National Insurance rise, and the same contracts may now need an Australian payroll tax review. Advisers in this area can be found through our tax specialists and Australia directories.

Frequently asked questions

What did the High Court decide in the Uber payroll tax case?

On 4 November 2026 the High Court of Australia dismissed Uber's appeal six to one, holding that fares Uber remitted to drivers are deemed wages under the Payroll Tax Act 2007 (NSW). Uber must pay the approximately $81 million assessed for 2015 to 2020, plus the Commissioner's costs.

Does the ruling make Uber drivers employees?

No. The court applied statutory contractor provisions that treat Uber as an employer and drivers as employees for payroll tax purposes only. It did not decide employment status at common law, or for employment rights, superannuation or income tax, each of which has its own test.

Why did the court reject Uber's payment agent argument?

The majority found that rider payments are funnelled through Uber, which deducts its service fee and can change or cancel fares. That control was inconsistent with drivers being entitled to the fares on receipt, so the amounts Uber remits are paid in relation to the drivers' work.

Who dissented in the Uber payroll tax decision?

Steward J dissented. He said payroll tax is a tax upon wages connected with employment, warned against giving vague statutory language its broadest possible meaning, and would have upheld Uber's first two grounds of appeal and allowed the appeal with costs.

What is the NSW payroll tax rate and threshold?

Revenue NSW applies a rate of 5.45% to taxable wages above an annual tax-free threshold of $1.2 million. Businesses must register once total Australian wages exceed the monthly threshold, and payments to contractors under relevant contracts count unless one of seven exemptions applies.

Which other businesses could be affected by the Uber payroll tax case?

Any intermediary that collects customer payments and pays workers could be exposed. Uber itself named mortgage brokers, service-based marketplaces, medical practices and other healthcare services. Earlier appellate cases had already applied the provisions to a medical centre and an optical business.

Sources

1. High Court of Australia, Uber Australia Pty Ltd v Chief Commissioner of State Revenue [2026] HCA 40, reasons for judgment, 4 November 2026: hcourt.gov.au
2. High Court of Australia, judgment summary [2026] HCA 40, 4 November 2026: hcourt.gov.au
3. High Court of Australia, case page S170/2025: hcourt.gov.au
4. Revenue NSW, Payroll tax thresholds and rates: revenue.nsw.gov.au
5. Revenue NSW, Payroll tax: contractors: revenue.nsw.gov.au
6. NSW Government, Minister for Finance, "High Court of Australia ruling on Uber and payroll taxes", 4 November 2026: nsw.gov.au
7. ABC News, 4 November 2026: abc.net.au
8. The Guardian, 4 November 2026: theguardian.com

About this article

Researched and written by The Corporate INTL Newsroom from the High Court's reasons for judgment and judgment summary, Revenue NSW guidance, the NSW Government's statement and contemporaneous reporting. It is general information, not legal or tax advice. Last reviewed 4 November 2026. For more analysis visit our newsroom or subscribe to our newsletter.