Uber Owes $81m in New South Wales After High Court Rejects Contractor Defense

Uber now faces a bill of more than $80 million in Australia following a ruling by the country's High Court. The decision, issued on Wednesday, determines that the rideshare company must pay payroll taxes in New South Wales. This outcome concludes a long legal dispute over whether drivers are employees or independent contractors.

The court issued a six-to-one decision finding Uber liable for $81 million. This amount covers the tax years from 2015 to 2020. Officials expect the total debt to exceed $100 million once later years are included. The ruling rejects Uber's previous argument that it did not employ its drivers and that the money paid to them did not qualify as wages under state law.

The majority opinion stated that Uber structured its business to funnel rider payments through the company. This arrangement gave Uber substantive control over fares before they reached drivers. The company could deduct service fees or change and cancel fares entirely. The justices concluded that these payments constituted wages because of this control.

Chief Justice Stephen Gageler noted that payroll tax laws in multiple states were revised in the late last century. These revisions aimed to capture revenue from contractual arrangements designed to conceal the true nature of working relationships. He wrote that these contractor provisions have continued to apply to participants in the gig economy as it emerged in this century.

Uber had previously succeeded in appealing an assessment issued by the NSW chief commissioner of state revenue. The High Court's ruling ends the company's legal options in this specific matter. The decision comes after legal experts predicted the case would shape tax obligations for companies with gig workers across Australia.

The New South Wales government stated that payroll tax remains a key part of the state's tax base. Only about one in twenty companies meets the threshold required to pay this tax. Finance Minister Courtney Houssos said the tax helps fund essential services that families and households rely on. She stated that local businesses pay their fair share and that Uber should do the same.

The case began when the state revenue office assessed Uber for unpaid taxes. Uber argued that its drivers were independent contractors. The High Court disagreed, establishing that the flow of money and control over fares defined the relationship. The $81 million figure represents the confirmed liability for the 2015 to 2020 period. Further calculations for subsequent years are pending.