Uber has been ordered to pay approximately $81 million in payroll tax to the New South Wales Government after losing a major legal battle in Australia's High Court on 4 November 2026. The decision could have significant consequences for the country's growing gig economy and businesses that rely on independent contractors.

The legal dispute concerns payments made to Uber drivers between the 2015 and 2020 financial years. Revenue NSW had assessed Uber for approximately $81.5 million in payroll tax, arguing that the money transferred to drivers should be treated as wages under state taxation laws.

Uber challenged the assessment, arguing that it operated primarily as a payment collection agent. The company maintained that passengers paid drivers for transportation services and that Uber simply collected the fares before transferring the money to drivers after deducting its service fees.

However, the High Court rejected Uber's appeal by a majority of six judges to one. The court determined that the payments made to drivers were covered by the relevant provisions of the NSW Payroll Tax Act 2007 and therefore counted as wages for payroll tax purposes.

The ruling means Uber must meet the outstanding payroll tax liability and pay the legal costs of the NSW Chief Commissioner of State Revenue.

The dispute has attracted considerable attention because of the growing importance of app-based transportation and delivery services in Australia. Companies operating in the gig economy often connect customers with independent service providers through digital platforms. Their business models frequently involve collecting customer payments and distributing money to drivers or other contractors.

The High Court's decision could encourage state revenue authorities to examine similar arrangements involving other businesses. Companies that depend on contractor-based services may need to review their financial structures and taxation obligations to ensure they comply with existing legislation.

The ruling also raises questions about how Australia's tax system should apply to modern digital businesses. Traditional payroll tax rules were originally developed around conventional employment and business arrangements. However, the rapid expansion of online platforms has created new commercial relationships that require courts and regulators to interpret existing laws.

The NSW Government welcomed the decision, stating that payroll tax contributes to funding essential public services used by families and communities. The government also emphasised that large businesses should meet their tax responsibilities in the same way as other organisations.

Uber has previously argued that existing payroll tax laws should be modernised to better reflect the way digital platforms operate. The company has raised concerns that the ruling could affect the costs of operating rideshare services and other platform-based businesses.

For drivers and customers, the longer-term effects remain uncertain. Any changes to operating costs could influence service prices, driver payments and the availability of rideshare services.

The decision represents an important legal development for Australia's gig economy. Businesses across the country will be watching closely as the implications of the judgment become clearer.