Ride-hailing company Uber has suffered a major legal setback in Australia after the High Court dismissed its appeal against an A$81.5m (approximately US$53m) payroll tax bill owed to the New South Wales government.

The ruling, delivered on Wednesday in a six-to-one decision, upheld the tax assessments covering the 2015 to 2020 financial years, bringing an end to the company’s legal challenge.

Uber had argued that it operated merely as a payment collection agent, receiving fares from passengers and transferring the money to drivers after deducting service charges. It maintained that the payments were not wages because drivers provided transport services directly to passengers rather than to the company.

However, the majority of the justices held that the payments made to drivers were connected to the performance of driving services under their contractual arrangements with Uber and therefore qualified as wages under the state’s payroll tax legislation.

The court found that Uber exercised substantive control over fares collected from passengers, including the ability to deduct service fees and alter or cancel payments before transferring the remaining amounts to drivers.

The decision upheld an earlier ruling by the New South Wales Court of Appeal, which had overturned a lower court judgment that initially favoured Uber.

The company was first assessed for more than A$81.5m in payroll taxes by the state’s Chief Commissioner of State Revenue. The assessment covered six financial years, from 2015 to 2020.

The ruling could have wider implications for businesses operating within Australia’s gig economy, particularly digital platforms that rely on independent contractors and payment collection arrangements.

The New South Wales government welcomed the judgment, describing payroll tax as an important source of revenue for funding public services.

State Finance Minister Courtney Houssos said businesses operating in the state were expected to meet their tax obligations, adding that Uber should make its contribution like other companies.

The Transport Workers’ Union also welcomed the decision, saying it reinforced the need for companies operating through digital platforms to comply with employment and taxation laws.

Although the case concerned New South Wales legislation, the judgment could influence how other Australian states interpret payroll tax obligations involving gig-economy workers.