Crypto Tax in Australia: How It Works, What You Owe, and How to Pay Less

While holding and trading crypto is entirely legal in Australia, figuring out how crypto taxes work in the land down under is no small task.

Especially since recent changes to the country’s crypto tax policy have only made things more complicated.

While we’re at it, you’ll also probably want to know about the unlikely way that Australians can get a 50% break on their crypto taxes.

That’s why we’ve put together this plain-English overview of crypto taxes in Australia.

Is Crypto Taxed in Australia?

Many basic crypto activities are taxed in Australia, so if you’re trading crypto there are a few things you might want to be aware of.

For the most part, Australia’s crypto tax rules fall under the umbrella of the country’s existing financial regulation.

The main type of tax that you might incur while trading crypto is capital gains tax (CGT).

That’s because, per the Australian Taxation Office (ATO), using crypto as an investment means that you’ll have to pay CGT.

Unfortunately, calculating the amount of capital gains tax that you owe on your trades is not as simple as we’ve seen in countries like Poland and Estonia, since there is no flat rate.

In Australia, your capital gains from crypto are considered as part of your personal income. They’re then taxed based on your marginal tax rate.

To help address this complexity, the country’s tax authority has released a free calculator that you can use to determine the amount of CGT you owe.

What Crypto Activities Are Taxable in Australia?

While not all crypto activities are taxable in Australia, many are.

In fact, changes to Australia’s crypto tax rules have only increased the number of situations in which you might owe capital gains tax.

As of press time, these are the key crypto activities defined in Australia as taxable events:

• Selling your crypto for fiat currencies, such as the Australian dollar.
• Gifting crypto.
• Buying goods or services with crypto.
• Trading one cryptocurrency for another (crypto-to-crypto swap).
• Receiving staking rewards (taxed as ordinary income when received).
• Receiving airdrop tokens (generally taxed as ordinary income when received).
• Mining crypto (proceeds treated as ordinary income when received).
• Receiving crypto as payment for goods or services (ordinary income at market value when received).

When, and how much, you owe will also depend on whether or not you are considered an investor or a trader for tax purposes. 

This is a subtle yet crucial distinction that you’ll need to work out when determining your tax obligations.

It’s also important to note that the Australian government instructs individuals and businesses to keep a record of all of their crypto transactions.

Australia Crypto Tax: What Is and Isn’t Taxable

👉 Quick takeaway: Buying and holding crypto creates no tax event, but most disposals trigger CGT. Staking rewards, airdrops, and mining income are taxed as ordinary income at receipt — with CGT applying again on later disposal.

Investor vs Trader: Why the Distinction Matters for Your Tax Bill

The ATO draws a clear line between crypto investors and crypto traders, and the distinction has a major impact on how much tax you pay.

Investor: You hold crypto as a long-term asset, trade occasionally, and are not running a systematic profit-seeking operation. Your gains are subject to CGT. You may be eligible for the 50% CGT discount on assets held over 12 months.

Trader / Business: You trade frequently, systematically, and with a clear profit motive. The ATO may classify you as running a business. Your gains are taxed as ordinary income — no CGT discount applies. You may, however, be able to deduct trading-related expenses.

How does the ATO decide? There is no single rule. The ATO looks at:

• The volume and frequency of your trades
• Whether you have a business plan
• Whether you keep detailed records
• Whether trading is your primary income source.

Whether trading is your primary income source. If you are unsure which category applies to you, the ATO recommends seeking professional advice, as the classification can change over time.

How Much Is Crypto Tax in Australia? (Rate Brackets)

In Australia, crypto is not taxed at a flat rate. Your capital gains from crypto are added to your total taxable income and taxed at your marginal rate.

For the 2024-25 financial year, Australian income tax brackets for residents are:

• $0 to $18,200 — 0% (tax-free threshold)
• $18,201 to $45,000 — 16% (from 1 July 2024 under Stage 3 tax cuts)
• $45,001 to $120,000 — 32.5%
• $120,001 to $180,000 — 37%
• $180,001 and above — 45%

The effective CGT rate on crypto therefore ranges from 0% to 45% depending on your total income. If you held the crypto for more than 12 months, you are eligible for the 50% CGT discount, which halves the taxable gain before it is added to your income.

Worked Example:

You bought 1 ETH for $3,000 AUD. You sold it 14 months later for $5,000 AUD. Your capital gain is $2,000. With the 50% CGT discount, only $1,000 is added to your taxable income. If your marginal rate is 32.5%, you owe $325 in tax on that trade. Without the discount (held less than 12 months), you would owe $650. Holding for 12 months saved you $325 on a single trade.

Staking Rewards, Airdrops and Mining: How Are They Taxed?

These four income types are treated differently from standard buy-and-sell trades. Here is how the ATO treats each:

1. Staking Rewards: The tokens you receive are ordinary income, assessed at their AUD market value on the day you receive them. When you later sell or swap those tokens, a separate CGT event is triggered. Your cost base for the CGT calculation is the value you already declared as income.
2. Airdrops: Generally treated as ordinary income when you receive them, at the market value on receipt. The ATO looks at whether you did anything to receive the airdrop (such as holding a qualifying token). CGT applies on any later disposal.
3. Mining Income: If you mine as an individual hobby, proceeds are generally ordinary income when received. If you mine as a business, the same applies but you may also have deductible expenses.
4. Payments Received in Crypto: If you are paid in crypto for work or services, the AUD value on the day of receipt is ordinary income. CGT applies if you later dispose of those tokens at a different value.

Why Australia’s Recent Crypto Tax Changes Are Controversial

In Australia, trading from one cryptocurrency to another is currently considered to be a taxable event.

It’s referred to as a crypto to crypto exchange or swap, and it could make you liable to pay CGT.

This is a stark departure from the approach taken by many other countries, where you only owe taxes when you realize your profits—usually by selling them for fiat currencies. 

It’s part of a broader set of controversial changes to how crypto taxes are calculated in the country.

These changes have been criticized as further complicating Australia’s crypto tax rules, while also leaving Australia behind countries that have taken a more generous stance.

Still, as recently as last year, the Department of the Treasury said it was working on forward-thinking crypto regulation designed to “address consumer harms” while promoting innovation.

The crypto-to-crypto swap rule remains one of the most debated aspects of Australia’s tax framework, as it requires investors to calculate and report a CGT event even when they have not converted to Australian dollars. This means you could owe tax on a paper gain that has since reversed in value — a risk that is particularly acute in volatile markets.

Whether Australia’s crypto tax rules will evolve to match more permissive frameworks remains to be seen. For now, understanding the current rules and keeping accurate records is the best way to stay compliant and minimize your tax bill.

How to Lower Your Crypto Taxes in Australia

For all of Australia’s crypto tax headaches, there are a few opportunities for reprieve.

After all, is there any better aspirin than a big tax break?

The first way to lower crypto taxes in Australia is to report your capital losses. 

Since crypto losses can be claimed on taxes in Australia, they can reduce the amount of capital gains that you are considered to have earned. 

This, in turn, can lower the amount of tax that you owe.

In addition, since the money you earn from crypto is usually taxed as part of your income, you shouldn’t owe tax if your salary and investments add up to less than the country’s tax-free threshold.

In other words, if all of your sources of income in a given tax year add up to less than $18,200 AUD, your crypto capital gains will likely not be taxable. 

Finally, another major way to lower your crypto taxes in Australia is to hold the same asset for more than 12 months before engaging in a taxable event. This is known as the CGT discount, and it is available to individuals, not businesses, who are legal Australian residents. In practice, the discount halves your taxable gain.

For example:

If you made a $4,000 AUD capital gain on a crypto sale and you held the asset for over 12 months, only $2,000 is added to your taxable income. At a 32.5% marginal rate, that means you pay $650 instead of $1,300 — a saving of $650 on a single trade.

While these types of tax reduction opportunities may make Australia an attractive trading ground for some, many of the country’s current rules in regards to taxable events are nothing shy of puzzling and rigid.

Record-Keeping: What the ATO Requires You to Track

The ATO requires you to keep records of every crypto transaction. Without accurate records, you cannot correctly calculate your CGT or income tax obligations.

For every acquisition, record:

• The date of the transaction
• The amount of crypto acquired
• The AUD value at the time of acquisition (this becomes your cost base)
• The name of the exchange or platform
• How you acquired it (purchase, airdrop, staking reward, etc.).

For every disposal, record:

• The date of the transaction
• The amount of crypto disposed of
• The AUD value of the proceeds at the time of disposal
• The resulting capital gain or loss
• Any transaction fees (these can reduce your cost base or be added to your cost).

The ATO recommends keeping records for at least five years after the relevant tax return is lodged. Many Australian investors use crypto tax software to automate this process by syncing exchange APIs and wallet addresses.

How to Report Crypto on Your Australian Tax Return

Crypto is reported on your standard individual income tax return, lodged through myTax or via a registered tax agent.

Here is what goes where:

• Capital Gains (CGT Events): Report net capital gains in the ‘Capital gains’ section of your tax return. You will need to calculate your total capital gains and total capital losses for the financial year. If your net position is a gain, it is added to your assessable income. If it is a net loss, it can be carried forward to offset future gains (it cannot offset ordinary income).
• Ordinary Income (Staking, Airdrops, Mining, Crypto Payments): Report these amounts in the ‘Other income’ section of your tax return at the AUD market value on the date you received the crypto. The ATO’s free Capital Gains Tax Record Keeping Tool can help you track and calculate your CGT obligations before lodging.

Frequently Asked Questions (FAQ)

IS cryptocurrency legal in Australia?

Most standard crypto activities are entirely legal in Australia.

For tax purposes, the government instructs that you keep a record of all of your crypto transactions.

Do you pay tax on crypto in Australia?

Crypto is taxable in Australia, primarily in the form of capital gains tax.

Do I pay tax on crypto staking rewards in Australia?

Yes. Staking rewards are treated as ordinary income by the ATO and are assessed at their AUD market value on the date you receive them. When you later sell or swap those tokens, a CGT event is also triggered.

What records do I need to keep for crypto tax in Australia?

The ATO requires you to keep records of every transaction including the date, the AUD value at the time, the platform used, and the nature of the transaction. Records should be retained for at least five years.

Can I use crypto tax software in Australia?

Yes. The ATO acknowledges that many investors use crypto tax tools to calculate their CGT obligations. These tools sync with exchanges and wallets to automate record-keeping and gain/loss calculations.

How much is capital gains tax in Australia?

In Australia, capital gains tax on crypto is not a flat rate. Your gains are added to your total income and taxed at your marginal rate, which ranges from 0% to 45% depending on your income. If you held the crypto for more than 12 months, the 50% CGT discount applies, effectively halving the taxable gain before it is added to your income.

Can you claim crypto losses on taxes in Australia?

In Australia, capital losses can offset the amount that you owe in taxes in some circumstances.

This means that it is often worth claiming your crypto losses when doing your tax return, as these losses can reduce your capital gains.

How do I cash out crypto in Australia?

Cryptocurrencies can be readily cashed out in Australia using a range of easily accessible exchanges and financial services. 

Importantly, the process of cashing out will likely constitute a taxable event, meaning you might have to pay capital gains tax.

Is Australia crypto friendly?

Whether or not any country is ‘crypto friendly’ is a matter of perspective. 

On the one hand, crypto is legal and accessible in Australia, and regulators have claimed to be interested in promoting innovation.

At the same time, however, the country’s current tax rules can be seen as both prohibitive and confusing for everyday crypto holders.