Crypto mining tax in Australia: income on receipt, CGT on later disposal
Crypto mining rewards are not tax-free. Whether you mine as a hobby or run a mining operation as a business, the ATO generally treats mining rewards as ordinary income at the market value on the day you receive them. Selling or swapping those mined coins later can trigger a separate CGT event.
How the ATO treats mining income
Mining rewards are taxed as ordinary income in the year you receive them, at the AUD market value on the date of receipt. This applies whether you are a hobby miner or operate at scale. The key distinction is what happens next: hobby miners hold the coins as CGT assets, while business miners may treat mined coins as trading stock, which changes the disposal treatment. Business miners can also deduct eligible expenses such as electricity costs and equipment depreciation.
Worked example
You mine 0.01 BTC worth AUD 800 on the day it is received. That AUD 800 is ordinary income for the tax year, and a new parcel is created at a cost base of AUD 800. Eight months later, you sell that 0.01 BTC for AUD 1,200. The capital gain is AUD 400 (AUD 1,200 proceeds minus AUD 800 cost base). Because you held the coins for less than 12 months, the 50% CGT discount does not apply to this disposal.
Common pitfalls
The hobby versus business distinction is the most common source of confusion for miners. The ATO looks at factors like the scale of the operation, commerciality, and profit intention. Getting this wrong can mean either missing legitimate deductions (if you are a business miner but filing as a hobbyist) or misstating the nature of your income. Electricity and hardware costs can be significant, and business miners should keep detailed records of all expenses to support deduction claims.
Using this estimator for mining
For hobby miners, you can model mining rewards in this estimator by entering each receipt as a staking_income event at the market value on the date of receipt. This creates ordinary income and a new cost base parcel for the coins. Any later disposal can then be entered as a sell event. Business mining with deductible expenses requires additional calculations outside this estimator.
Quick single-transaction estimate
Enter a single buy-and-sell scenario to see your estimated CGT impact.
Frequently asked questions
Is crypto mining taxable in Australia?
Yes. Mining rewards are generally treated as ordinary income at the market value on the date of receipt, whether you mine as a hobby or as a business. Business miners may also deduct mining expenses such as electricity and hardware costs.
What is the hobby vs business distinction for crypto mining?
The ATO considers factors such as scale, commerciality, and profit intention. Hobby miners report income but cannot deduct expenses beyond the income. Business miners can deduct expenses but may have different CGT treatment on disposal, as mined coins could be treated as trading stock rather than CGT assets.
Related guides
Tax Accuracy & Sources
General information about crypto tax in Australia for individual investors. Not tax advice.