High Court orders Uber to pay $81 million in payroll tax to NSW, redefining gig economy employment relationships
Uber has been ordered to pay $81 million in payroll tax to the New South Wales tax office following a High Court ruling.
The court found that Uber’s arrangement with its drivers constitutes a contract, making the fares paid to drivers liable for payroll tax.
Uber warned that the decision might impact other businesses by causing “significant unintended consequences.”
The Transport Workers’ Union described the decision as a “critical reality check” for companies bypassing regulations.
Uber ruling
Uber attempted to challenge a previous assessment imposing payroll tax on driver fares from 2015 to 2020 but the appeal was dismissed by the High Court, as earlier reported by abc.net.au.
Chief Justice Stephen Gageler declared that the wages paid to drivers are tied to work performance, defining them as “wages” under payroll tax laws.
The High Court’s joint judgment supported the notion that Uber’s model relies on collecting service fees from drivers’ work.
The ruling may encourage other states to enforce stricter tax interpretations for gig economy companies employing contractors.
In response, Uber respected the decision but criticized its broad implications on digital platforms and various industries.
The company urged state governments to update payroll tax laws to adequately reflect how digital platforms operate.
The Transport Workers’ Union welcomed the ruling as a reminder for companies to contribute fairly under Australian laws.
New South Wales Finance Minister Courtney Houssos endorsed the decision, stating it ensures essential state services are funded properly.
