Crypto Staking Rewards: Income vs CGT Treatment
When you earn staking rewards, the ATO treats them as ordinary income at the moment you receive them. But a second tax event can occur when you dispose of those tokens. Here's how both layers of tax work.
| Staking as Income | CGT on Disposal | |
|---|---|---|
| When taxed | When rewards are received | When tokens are sold or swapped |
| Tax type | Ordinary income (marginal rate) | Capital gains tax |
| Amount taxed | AUD market value at receipt | Sale price minus cost base |
| CGT discount | Not applicable | 50% if held 12+ months |
| Offset by losses | No (it's income) | Yes (capital losses apply) |
The ATO View: Staking Rewards Are Ordinary Income
The ATO's current position is clear: crypto staking rewards are ordinary income, not capital gains. This means the AUD market value of your tokens at the time you receive them is added to your assessable income for that financial year.
This applies regardless of whether you withdraw the tokens from the staking platform or leave them staked. The tax event occurs at the point of receipt, not at withdrawal.
Timing of the Tax Event
Income Event (Receipt)
You receive 0.5 ETH as staking rewards when ETH is $4,000:
- Assessable income: $2,000
- Taxed at your marginal rate
- Cost base for future CGT: $2,000
CGT Event (Disposal)
You sell 0.5 ETH 14 months later when ETH is $6,000:
- Capital gain: $3,000 - $2,000 = $1,000
- After 50% discount: $500
- Taxed at your marginal rate
Cost Base for Future CGT
The AUD market value you report as income becomes the cost base for those tokens. When you later sell, swap, or spend them, you calculate your capital gain or loss using that cost base.
- Price goes up: You pay CGT on the increase above your cost base
- Price goes down: You have a capital loss that offsets other gains
- Price stays the same: No CGT payable (but you already paid income tax on receipt)
Record Keeping Requirements
Because staking creates two separate tax events, thorough records are essential. For each staking reward you need:
- Date received: The exact date tokens appeared in your wallet
- Number of tokens: How many tokens you received per reward distribution
- AUD market value: The price at the time of receipt (use a reputable exchange rate)
- Platform details: Which protocol or exchange paid the reward
- Disposal records: Date sold, sale price, and method (FIFO, specific identification)
Tip: Many staking platforms distribute rewards frequently (daily or even per-block). Crypto tax software can automate the tracking of hundreds of small reward transactions.
Common Mistakes to Avoid
- Ignoring income on receipt: Some people only report CGT on sale, missing the income component entirely
- Double-counting: Reporting the full sale price as a capital gain instead of deducting the cost base (already taxed as income)
- Wrong valuation date: Using the date you unstaked rather than the date you received the reward
- Forgetting compounding rewards: If rewards are auto-staked and earn further rewards, each layer is a separate income event
Open the crypto tax app
Calculate income from staking rewards and CGT on disposal with FIFO matching and AUD conversion.
Open Crypto Tax CalculatorFrequently Asked Questions
Are crypto staking rewards taxed as income in Australia?
Yes. The ATO's position is that staking rewards are ordinary income, taxed at your marginal rate in the financial year you receive them. You must report the AUD market value of tokens at the time they are received.
Do I pay CGT when I sell staking rewards?
Yes. When you later sell or swap the tokens you received as staking rewards, a separate CGT event occurs. Your cost base is the AUD market value you already reported as income. If you held the tokens for 12+ months, the 50% CGT discount applies.
What records do I need to keep for staking rewards?
You should record the date each reward was received, the number of tokens, the AUD market value at the time of receipt, and the wallet or platform used. These records establish your income amount and future CGT cost base.
Can I offset staking income with crypto losses?
No. Staking income is ordinary income, not a capital gain, so it cannot be offset by capital losses. However, capital losses can offset capital gains you make when you later dispose of the staking reward tokens.