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.
| 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'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.
Income event (receipt)
You receive 0.5 ETH as staking rewards when ETH is $4,000:
CGT event (disposal)
You sell 0.5 ETH 14 months later when ETH is $6,000:
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.
Because staking creates two separate tax events, thorough records are essential. For each staking reward you need:
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.
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.
Tax Accuracy & Sources
Explains the ATO position that crypto staking rewards are ordinary income at receipt, with a subsequent CGT event on disposal. Treatment for certain DeFi structures may differ; obtain tailored advice for complex arrangements.