Uber’s rideshare model does not shield it from payroll tax, court finds

Ridesharing giant Uber failed to convince the High Court to overturn a NSW Court of Appeal decision that it was liable for $81 million in payroll tax on payments made to drivers for work performed under its driver contracts between 2015 and 2020.

Uber was unsuccessful in its argument that drivers appointed it as their “limited payment collection agent” solely to accept fares, tolls, and other taxes and fees on their behalf, and the contract made it clear that payments made by Uber “shall be considered the same as payment made directly by the rider to the driver”.

The High Court found Uber’s drivers were employees and their fares were wages under payroll tax legislation.

It turned on contractor provisions of the Payroll Tax Act 2007 (NSW), which may deem a business to be an employer and a contractor to be an employee for payroll tax purposes, even when they are not defined as employees in the ordinary sense.

Uber raised three issues during the appeal, including that drivers were providing the service to its passengers, rather than Uber.

It submitted drivers agreed to transport riders from their nominated pick-up location to their chosen destination, and that drivers were not required to accept every ride offered to them.

On Wednesday, 4 November, Chief Justice Stephen Gageler, joined by the majority of the High Court bench, added it was “plainly in the commercial interests of Uber to bind the driver to ensure that the transportation service, once started, was completed”.

Uber also argued it was excluded from payroll obligations because drivers used their own vehicles to complete the service, but Chief Justice Gageler said use of the vehicle “is not of greater contractual significance than the performance of the work driving it”.

Its final claim was that payments could not be considered wages because they were fares paid by passengers to drivers.

Uber added the payments had to represent remuneration for work performed for Uber to be qualified as wages under the act.

In rejecting that interpretation, the High Court said there was no reason for drivers to not owe a contractual obligation to both Uber and the passengers. It also had regard to the amount paid being directly linked to the work performed, including distance travelled.

“The manner of calculation both of the fare to be paid by the rider (calculated in part by reference to distance) and of the service fee to be deducted by Uber (calculated as a percentage proportion of the fare) meant that there was, as the Court of Appeal pointed out, a ‘direct relationship between the performance of work and what was payable by Uber to drivers’,” Chief Justice Gageler said.

Citation: Uber Australia Pty Ltd v Chief Commissioner of State Revenue [2026] HCA 40.