If you sell or swap your cryptocurrency and make a profit, you may need to pay tax on that profit, as crypto profits are subject to capital gains tax (CGT) in Australia (unless you are a professional trader).
Disclaimer: This calculator provides an indicative estimate only and does not constitute tax advice. Calculating capital gains tax liability is complex and you should consult your tax adviser to fully understand and comply with your Australian tax obligations. Each customer’s tax situation will be different, and the estimate provided below is based solely on the inputs you provide.
See more: How to calculate crypto tax australia
How Does Tax on Cryptocurrency work?
The ATO views cryptocurrency as property and therefore it is subject to capital gains tax (CGT). A capital gain is realised if you dispose of an asset (e.g. Bitcoin) for a higher value than you acquired it. A capital loss is realised you dispose of an asset (e.g. Bitcoin) for a lower value than you acquired it. You will need to calculate the gain or loss for each crypto sale or swap transaction you have made and you may be able to net these gains and losses together.
It’s important to note that CGT is not a separate tax. The net capital gain you make is added to your assessable income during the year you dispose of the crypto asset and is taxed at your marginal tax rate.
For detailed information on how cryptocurrency is taxed in Australia, read Swyftx’s Crypto Tax Australia Guide for 2021.
How to use our Australian crypto tax calculator
Our crypto tax calculator estimates how much CGT you would have to pay when you sell or swap your cryptocurrency asset. To use this calculator you’ll need to provide a few details about your crypto asset. These have been explained below:
- Sold price – This is the total value in AUD you disposed of the asset for, e.g. you sold Bitcoin for $15,000, or you swapped Bitcoin for ETH that had a value of $15,000
- Cost basis – This is the value you originally paid for the crypto you are disposing of and is your total investment to acquire the asset in AUD including any fees or other costs e.g. you originally bought the Bitcoin for $5,000, or you originally swapped ETH with a value of $5,000 for the Bitcoin
- Taxable income – This is your total taxable income for the year in which you sold the crypto asset and includes your salary and other income you may earn. This allows us to determine the tax rate to be applied to your crypto capital gains
- Length of Ownership – If you held the crypto asset for longer than 12-months, you are eligible for a 50% CGT discount; this means that only 50% of the capital gain is included in your assessable income
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When you have entered the above details, click the ‘Calculate’ button to get estimates for the CGT you’ll need to pay on your cryptocurrency asset disposal.
Example Crypto Tax Calculation
The following example is for the purposes of estimating CGT on profit made from cryptocurrency. CGT is not a separate tax by itself. Capital gains are added to your assessable income to become part of your income tax. Capital losses may also impact the net capital gains you need to report.
Jane buys $5,000 worth of Bitcoin and 18 months later sells it for $15,000. Jane’s capital gain is $10,000. Given that she owned the asset for over 12 months, she will get a 50% CGT discount. This means that she will only need to pay tax on $5,000.
This $5,000 will be added to Jane’s assessable income.
Jane has a salary of $100,000. Her total assessable income will be $105,000 due to the capital gain she has made on the sale of her Bitcoin. She therefore falls into the $45,001 – $120,000 tax bracket. The tax rate on this particular bracket is 32.5%.
For the purpose of estimating Jane’s CGT tax on her crypto asset alone, we then apply this 32.5% tax rate to the $5,000 capital gain included in Jane’s assessable income.
0.325 * $5,000 = $1,625
Jane’s estimated capital gains tax on her crypto asset sale is $1,625
Minimizing capital gains on crypto
It’s important to keep all your receipts for costs related to purchases of capital gains assets. These costs could include trading fees, withdrawal fees and any other costs incurred when purchasing or trading crypto.
The most effective way to minimize your crypto capital gains tax is to own the asset for over 12 months, as this will give you a 50% discount. The Swyftx cryptocurrency tax calculator will ask you if you’ve held your crypto asset for 12 months. If you have, the calculator will automatically apply a 50% discount to your capital gain.
What if the cryptocurrency tax calculator shows a loss?
When you sell an asset for a price lower than when you bought it, this is recorded as a capital loss. Capital losses can be used to offset capital gains, in order to lessen CGT. If you record a capital loss, the calculator will show you how much you lost and provide the following message “Please consult your tax advisor on implications of realising capital losses.”
How do I get tax records for my cryptocurrency assets
Swyftx’s cryptocurrency tax calculator Australia gives you an estimate of what tax you’ll pay on profit made from a crypto sale. However, it’s best to speak to a tax accountant who specialises in cryptocurrency for further advice.
Alternatively, Swyftx partners with both Koinly, and Crypto Tax Calculator, who offer crypto tax reporting services to taxpayers in Australia. They use software to keep a record of all your trades so that you can easily convert them into AUD equivalents.