With the ATO cracking down on crypto, it’s important you know your Australian crypto tax rates for 2022. Understanding the ATO stance on crypto taxes helps ensure you don’t pay too little (or too much!) in taxes - and avoid harsh penalties. Learn about the crypto tax rates in Australia before your tax deadline.
Do you know what the Bitcoin tax rate in Australia is? What about other crypto tax rates for popular coins like BNB, ADA or ETH?
You need to. The ATO have explicitly stated they’re coming after crypto investors who aren’t paying their fair share in crypto taxes. They’ve announced they’re working with crypto exchanges based in Australia to share customer information and have already sent out more than 350,000 crypto tax warning letters to investors they believe have capital gains.
All this to say, it’s important you understand your crypto tax rate, as well as calculate and report your crypto taxes to ATO.
The Australian crypto tax rate isn’t quite as straightforward as investors might expect. Cryptocurrency doesn’t have an exclusive tax treatment in Australia. Instead, it’s taxed as income or capital gains… or sometimes both!
The exact crypto tax rate you’ll pay depends on the type of transaction you’re making and how ATO views it, as well as how much you earn through employment.
We’re breaking down everything you need to know about Australian crypto tax rates in this article.
Australia crypto tax rates 2021 - 2022
Australia doesn’t see bitcoin or other cryptocurrencies as a currency. The ATO instead views cryptocurrencies as property and subjects it to Capital Gains Tax. Crypto can also in some instances be viewed as income and subjected to Income Tax. The tax you'll pay depends on the type of crypto transactions you’re making.
We’ll be talking about crypto tax rates for Australian investors in this guide. That distinction is important because if you’re considered to be a acting as a business instead, then your crypto tax rates will be different. Find out more here.
Australian Tax Deadlines 2021 - 2022
The Australian tax year runs from the 1st of July 2021 to the 30th of June 2022.
1st July 2021: 2021 - 2022 tax year starts.
31st October 2021: Deadline for tax returns for previous tax year (2020 - 2021)
15th May 2022: If you're using a registered tax agent to file your taxes, this is the typical deadline for registering your tax return for the previous tax year (2020 - 2021).
30th June 2022: 2021 - 2022 tax year ends.
1st July 2022: 2022 - 2023 tax year starts.
31st October 2022: Deadline for filing your tax return for 2021 - 2022 tax year.
15th May 2023: If you're using a registered tax agent to file your taxes, this is the typical deadline for registering your 2021 - 2022 tax return.
How and when is crypto taxed as income in Australia?
If you’re seen to be ‘earning’ crypto, this will be taxed under Income Tax, not Capital Gains Tax. Although, if you sold, swapped or gifted that asset later, this would also be subject to Capital Gains Tax. Examples of crypto transactions that the ATO view as income include:
Your crypto tax rate for income is the same as your regular income tax rate.
Australian Income Tax allowances
All Australian residents get a personal income tax allowance of $18,200. You’ll pay no tax on the first $18,200 of income. This is also known as the tax free threshold.
Australian Income Tax rate brackets 2021 - 2022
Your crypto tax rate will be the same as the highest tax band you fall into, as it’s additional income. You can use the table below to figure out your Income Tax rate bracket:
Australia uses a progressive tax rate system. This means you won’t pay the same flat rate on all your earnings. Instead, as you earn more, you’ll pay more tax but only on earnings that fall into the higher Income Tax rate brackets.
It’s also important to note that these tax rate brackets do not include the 2% Medicare levy.
How to work out how much you owe in crypto income tax
To work out how much you owe in Income Tax for crypto earnings, follow these steps:
- Identify which Income Tax rate bracket you’re in. Any additional income from crypto will be taxed in this band, or the band above if you reach your bracket’s threshold.
- Identify any crypto earnings you’ve made throughout the last financial year.
- Calculate the fair market value (FMV) of these assets in AUD on the day you received them. Koinly does this for you.
- Add up the total value of these assets in AUD. This is your total additional income from crypto.
- Add your additional income to your regular income and see which Income Tax rate bracket you’re in. This will be the crypto tax rate you’ll pay.
You earn $60,000 from your job. In this financial year, you've also made $10,000 from crypto income.
$60,000 + $10,000 = $70,000.
This puts you in the $45,001 - $120,000 tax rate bracket. Your crypto tax rate will be 32.5%, so a total of $3,250.
How and when is crypto taxed as a capital gain in Australia?
When you sell, swap, spend or gift a crypto asset in Australia, this is seen as a disposal of an asset and subject to Capital Gains Tax. Crypto transactions that are subject to Capital Gains Tax in Australia include:
- Exchanging crypto for fiat currency.
- Exchange crypto for crypto - including stablecoins!
- Using crypto to buy goods or services.
- Gifting crypto.
The whole asset isn’t subject to Capital Gains Tax, only any profit from the disposal. So you’ll pay tax on the difference between the price you originally bought it for and the price you sold it for. The exact amount of Capital Gains Tax you’ll pay depends on how much you earn, as well as how long you’ve held the asset for.
Short and long-term gains in Australia
Australia taxes short-term capital gains and long-term capital gains differently. Short-term gains apply to any asset you’ve held for less than a year, while long-term gains apply to any asset you’ve held for more than a year.
Your short-term capital gains are taxed at the same rate as your regular Income Tax rate bracket.
Meanwhile, long-term capital gains receive a 50% Capital Gains Tax discount.
Personal Use Asset
Australia doesn’t have any specific capital gains allowance like some other countries do. If you earn less than $18,200, you’ll pay no Capital Gains Tax or Income Tax.
This said, they do have the personal use asset rule. This rule only applies to crypto in very specific circumstances. It states assets disposed of to buy personal goods valued under $10,000 are free from capital gains tax, but only when you have explicitly bought that asset for the purpose of buying personal goods. So the longer you've held your crypto, the less likely it is to be considered a personal use asset.
Australian tax rate on crypto gains
Your crypto tax rate on capital gains is based on your regular Income Tax rate bracket. So you’ll pay the same crypto tax rate as you do on your earnings for short-term gains. For long-term gains, you’ll only pay tax on half your capital gains.
As well as this, you can subtract your net capital losses from your net capital gains.
How to work out how much you owe in Capital Gains Tax
- Work out your taxable income and identify the Income Tax rate bracket you're in.
- Calculate your total capital gains and losses from your crypto investments in AUD, as all as which are short-term and which are long-term gains. You'll also need to subtract your net capital loss from your net capital gains. Koinly does all this for you.
- Add your net capital gains figure to your total taxable income figure from earlier.
- Identify which Income Tax rate band your crypto income falls into. This is your crypto tax rate for capital gains.
You earned $60,000 from your job. You also made a net capital gain of $12,000 from your crypto investments, as well as a net capital loss of $1,000. Subtract your net capital loss from your net capital gain, leaving $11,000.
$60,000 + $11,000 = $71,000. This puts you in the $45,001 - $120,000 tax rate bracket, meaning you'll pay 32.5% on any short term capital gains, as well as 32.5% on half of any long term capital gains.
You know that $3,000 of your capital gains are long-term and $8,000 of your capital gains are short-term.
$3,000 / 2 = $1,500. Add this to $8,000, making $9,500 in capital gains subject to 32.5% tax.
32.5% of $9,500 = $3087.5. This is how much you'll pay in Capital Gains Tax overall.
Are any crypto transactions exempt from tax in Australia?
Yes! There are certain crypto transactions that are not subject to Capital Gains Tax or Income Tax in Australia. These include:
- Buying crypto with fiat.
- HODLing crypto.
- Being gifted crypto.
- Mining crypto - only at a hobby level.
- Transferring crypto between your own wallets.
- Donating crypto to registered charities.
When to file Australian crypto taxes
The Australian tax deadline is the 31st of October 2022. You need to file taxes for the previous financial year of July 1 2021 to June 30th 2022. If you're filing through an accountant, the deadline is the 31st of March 2023.
How to file Australian crypto taxes with Koinly
You can report your crypto taxes in Australia online or send them in by post.
If you're reporting them online, you need to calculate your total crypto taxes first. For low volume investors, this isn't too much hard work, but for high volume investors with thousands of trades, this can take days. Using crypto tax software like Koinly helps you avoid the hassle as it identifies all your taxable transactions, applies the right tax and calculates your total taxes for you. You can download specific tax reports for Australian investors like your ATO report for myTax from your Koinly tax reports page.
All you need to do once you know your crypto tax totals is go to myTax from your myGov dashboard.
If you'd rather kick it old school, you'll need two forms - one for your crypto income taxes and one for your crypto capital gains. You can find these on the ATO site to print out.
For crypto income: use the Tax Return for Individuals 2022 form. Crypto income is declared on question 2.
If you have any capital gains, you'll need to answer yes on question 1 of the Taxpayer's Declaration on this form.
For crypto capital gains: you'll need the Tax Return for Individuals (Supplementary Section).
Complete question 18. Report your net capital gains under 18H 'current year capital gains'. Report your net capital loss on 18V 'NET capital losses carried forward to later income years'. Report your final capital gains figure in 18A 'net capital gain'.
As with above, you'll still need to have calculated all your crypto taxes before you fill out these forms. Koinly can help you do this in a fraction of the time.
You can find more helpful information in our Australia Crypto Tax Guide.