High Court rules rideshare driver fares are wages under NSW law, leaving Uber with a massive bill and contractor models under scrutiny
Uber must pay about $81 million in New South Wales payroll tax after the High Court of Australia ruled that fares passed on to its drivers count as wages, a decision with direct implications for any business that relies on independent contractors.
A majority of the court dismissed Uber’s appeal in full today (4 November), upholding payroll tax assessments issued by the NSW Chief Commissioner of State Revenue for the 2015 to 2020 financial years. Uber has also been ordered to pay the Chief Commissioner’s legal costs.
Payroll tax is a state-based tax levied on the wages businesses pay above a set threshold. The central question in the case was whether money Uber passed to drivers after deducting its service fee fell within that definition.
Uber argued it was simply a payment collection agent, taking fares from riders and handing them on to drivers, and should sit outside NSW payroll tax rules.
That argument succeeded at first instance in the NSW Supreme Court in September 2024. The NSW Court of Appeal unanimously overturned that ruling on 1 August 2025, and the High Court granted Uber special leave to appeal on 4 December 2025.
The High Court majority has now found that drivers worked under contracts captured by the Payroll Tax Act 2007 (NSW), meaning the fares they received are treated as wages for payroll tax purposes.
Union calls ruling a reality check for tech platforms
The Transport Workers’ Union (TWU) welcomed the decision, saying it showed that companies must pay their share of tax whether or not the people they engage are employees.
“This High Court decision is a critical reality check to companies seeking to skirt our laws: even companies who engage workers who may not be employees will have to pay their fair share,” said Michael Kaine, TWU national secretary.
“Tech giants have spent years trying to convince governments right around the world that laws don’t apply to them because they operate through apps and algorithms,” Kaine said.
The union linked the ruling to a recent Fair Work Commission (FWC) decision setting minimum pay and conditions for food delivery workers under laws passed by the Albanese Government. It said its own application to lift pay and conditions for rideshare workers is before the commission. The TWU is also calling for the rollout of driverless robotaxis to be halted until stringent safeguards are in place.
What does the ruling mean for HR leaders?
The decision turns on the Act’s contractor provisions, which can treat payments to contractors as wages for tax purposes. It is a tax ruling rather than a finding on drivers’ employment status under federal workplace law, the Fair Work Ombudsman previously concluded, after its investigation into Uber’s engagement of its drivers, that the relationship was not one of employment.
The distinction offers platforms little comfort. Legal advisers have warned that revenue authorities in other states and territories are likely to step up payroll tax compliance activity across the gig economy following the NSW litigation.
The exposure is not limited to rideshare: mortgage aggregator Finsure has also challenged Revenue NSW assessments that applied the same contractor provisions to its broker arrangements, and the NSW Parliament has been inquiring into how those provisions operate.
The ruling adds to a long list of legal tests for platform work in Australia, from Uber’s settlement of a potential landmark case brought by a former delivery driver to the workers compensation test case looming over gig economy employers.
For HR and payroll leaders, the practical message is to review contractor arrangements now, particularly where contractors deliver a service central to the business and payments are tied directly to the work performed.
