Crypto mining tax in Australia: income on receipt, CGT on later disposal

How the ATO treats mining income

Whether mining income is taxed on receipt depends on whether you are carrying on a mining business. Business miners (assessed on factors like scale, commerciality, and profit intention) include the AUD market value of mined coins as ordinary income when received, hold the coins as trading stock, and can deduct eligible expenses such as electricity costs and equipment depreciation. Hobby miners do not report any income when coins are mined — the coins become a CGT asset with a cost base equal to their AUD market value at that time, and tax is only payable as a capital gain or loss when the coins are later disposed of. Hobby miners cannot deduct mining costs such as electricity or hardware.

Worked example

Suppose you mine 0.01 BTC worth AUD 800 on the day it is received. If you are a business miner, that AUD 800 is ordinary income for the tax year. If you are a hobby miner, the AUD 800 is not income. Either way, 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 over-reporting ordinary income at receipt for coins that should only be taxed as a capital gain on disposal (if you are a hobby miner but filing as a business). 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 business 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. For hobby miners, do not use a staking_income event for the receipt — that would incorrectly add ordinary income. Instead, track the AUD market value at receipt as the parcel's cost base and enter only a sell event when you dispose of the coins. 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

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