Australia Crypto Mining Tax Guide 2025

ATO Treatment of Mining

The ATO treats crypto mining as ordinary income:

• Mining rewards = assessable income when received
• Taxed at marginal rate (19-45% + Medicare levy)
• Classified as business income or hobby income
• Cost base = income value (for future CGT)

Business vs Hobby Mining

Business Mining (Most Serious Miners)

If mining in a business-like manner:

• Report on business income tax return
• 100% taxable at marginal rate + 2% Medicare levy
• Can deduct business expenses
• Can claim instant asset write-off or depreciation
• Can offset losses against other income
• Need ABN (Australian Business Number)
• May need GST registration

Hobby Mining (Casual Miners)

If mining as a hobby:

• Report on myTax (Item 24: Other income)
• 100% taxable at marginal rate + Medicare levy
• Cannot deduct expenses (hobby losses not deductible)
• No ABN or GST needed

How ATO Determines Business vs Hobby

ATO considers these factors:

• Profit intent: Genuine intention to make profit?
• Commercial manner: Business-like operations?
• Size and scale: Significant capital investment?
• Repetition and regularity: Ongoing, systematic activity?
• Business plan: Planned and organized?
• Expertise: Relevant skills and knowledge?

Example: Business vs Hobby

Business:

• Invested AUD $80,000 in mining equipment
• Registered ABN and GST
• Dedicated facility, business electricity account
• Business plan targeting profitability
• Mining as primary income source

Hobby:

• Personal gaming PC mining when idle
• Annual income AUD $600
• No business structure or records
• Casual interest, not profit-driven

Income Calculation

When is Income Recognized?

When you receive coins (derive income):

• Solo mining: When you successfully mine a block
• Pool mining: When pool credits your account

Fair Market Value

FMV = AUD value at time of receipt:

• Use reputable Australian exchange rate
• Be consistent with valuation method
• Document source and rate used

Example: Income Calculation

• March 15, 2024: Receive 0.06 BTC from mining pool
• BTC price: AUD $100,000
• Assessable income: 0.06 × $100,000 = $6,000
• Cost base for CGT: $6,000

ABN & GST (Business Miners Only)

Australian Business Number (ABN)

Required if carrying on a business:

• Register for free at ABN website
• Needed for business tax return
• Allows you to issue tax invoices

GST Registration

Must register if:

• GST turnover ≥$75,000 per year
• "Turnover" = value of mined crypto
• Voluntary registration allowed if below threshold

How GST Works for Mining

• GST on income: 10% of FMV of mined crypto
• GST credits: Claim GST paid on expenses (equipment, electricity)
• BAS reporting: Quarterly or monthly

Example: GST

• Mine crypto worth $100,000
• GST on supply: $100,000 × 1/11 = $9,091 owing
• Equipment purchased: $50,000 (GST: $4,545)
• GST credits: $4,545
• Net GST: $9,091 - $4,545 = $4,546 owing

Deductible Expenses (Business Miners)

Common Deductions

1. Electricity: Power consumption for mining
2. Equipment: Mining hardware (instant write-off or depreciation)
3. Rent: Dedicated mining space
4. Internet: Business portion
5. Cooling: HVAC and ventilation
6. Repairs and maintenance: Equipment repairs
7. Pool fees: Mining pool charges
8. Software: Mining software subscriptions
9. Professional fees: Accountant, tax adviser
10. Insurance: Business insurance

Instant Asset Write-Off

Temporary full expensing (check current ATO rules):

• Immediate deduction for eligible assets
• Limits and eligibility vary by year
• Check ATO website for current thresholds

Depreciation (If Not Using Instant Write-Off)

Mining equipment depreciation:

• Effective life: 3-5 years (self-assess or use ATO rates)
• Diminishing value or prime cost method
• Claim decline in value each year

Example: Instant Asset Write-Off

• Buy $40,000 in ASIC miners
• Eligible for instant write-off
• Deduct full $40,000 in year of purchase

Example: Depreciation

• Buy $40,000 equipment (4-year effective life)
• Diminishing value: 50% rate
• Year 1: $40,000 × 50% = $20,000 deduction
• Year 2: $20,000 × 50% = $10,000 deduction

Selling Mined Crypto

Capital Gains Tax

When you sell mined coins:

• Capital gain/loss = proceeds - cost base
• Cost base = income value when mined
• 50% CGT discount if held >12 months from mining date
• Report on myTax or business return

Example: Selling Mined Coins (Short-Term)

• March 2024: Mine 0.1 BTC (income: $10,000)
• September 2024: Sell for $12,000 (held 6 months)
• Capital gain: $12,000 - $10,000 = $2,000
• No discount: $2,000 fully taxable

Example: Selling Mined Coins (Long-Term)

• March 2024: Mine 0.1 BTC (income: $10,000)
• April 2025: Sell for $15,000 (held 13 months)
• Capital gain: $15,000 - $10,000 = $5,000
• 50% discount: $5,000 × 50% = $2,500 taxable

Full Tax Burden Example

• When mined: $10,000 ordinary income (100% taxable)
• When sold (13+ months later): $5,000 gain ($2,500 taxable with discount)
• Total economic value: $15,000
• First $10,000 taxed as ordinary income, next $5,000 as capital gain (50% discount)

Tax Rates

Income Tax Rates (2024-25)

Plus 2% Medicare levy on all income

CGT Discount

• Held >12 months: 50% discount (pay tax on 50% of gain)
• Held ≤12 months: No discount (pay tax on 100% of gain)

How to Report

Business Miners

1. Business tax return: Mining income and deductible expenses
2. Capital gains section: If selling mined coins
3. BAS (if GST registered): Quarterly or monthly GST reporting

Hobby Miners

1. myTax: Item 24 (Other income) - "Cryptocurrency mining"
2. Capital gains section: If selling mined coins

Deadlines

• Individual (self-lodged): October 31
• Individual (via tax agent): May 15 (following year)
• Business: Varies by structure
• BAS: 28 days after quarter end (if quarterly)

Record Keeping

Keep records for 5 years after lodging:

• Mining pool statements (dates, amounts, AUD values)
• Wallet addresses and transaction hashes
• Equipment purchase invoices
• Electricity bills with business use calculation
• Repair and maintenance receipts
• Pool fees and software subscriptions
• ABN and GST records (if applicable)
• Cost base calculations

Tools for Mining Tax

• Koinly - Australia mining income, myTax integration
• CryptoTaxCalculator - Australian-focused, ATO-compliant
• CoinTracker - Mining categorization

Common Mistakes

1. Not reporting mining income: ATO requires reporting when coins received
2. Claiming business deductions for hobby: Hobby losses not deductible
3. Not registering for ABN when required: Business miners need ABN
4. Missing GST registration: Required if turnover ≥$75,000
5. Using $0 cost base for CGT: Cost base = income value when mined
6. Not claiming 50% CGT discount: Available if held >12 months
7. Forgetting Medicare levy: Additional 2% on all income

FAQs

Is crypto mining taxed as income in Australia?

Yes. Mining rewards are ordinary income (assessable income) at fair market value when received.

Do I pay tax when I mine or when I sell?

Both. Ordinary income tax when mined, then capital gains tax when sold (on any appreciation).

Is mining business income or hobby income?

Depends on intent and manner of operations. Most serious miners with dedicated equipment = business. Casual miners = hobby.

Can I deduct mining expenses?

Business: Yes, deduct electricity, equipment, and other expenses. Hobby: No deductions allowed.

Do I need an ABN for mining?

Business miners: Yes. Hobby miners: No.

Do I need to register for GST?

Yes, if business mining turnover ≥$75,000 per year.

Can I claim instant asset write-off?

Business miners may be eligible for instant asset write-off on mining equipment. Check ATO website for current thresholds and eligibility.

What if I mine at a loss?

Business: Can offset losses against other income. Hobby: Cannot deduct losses.