Airdrops have been one of crypto's biggest marketing tactics for years: projects distribute tokens to users, often for free, to drive activity on a new chain or protocol. The ATO's treatment hinges on what kind of airdrop you received.

Two ways airdrops reach you

• Direct to wallet: tokens arrive with nothing required from you, and no gas to pay.
• Claimed by wallet: you claim from a site before a deadline, paying gas to do so. Miss the deadline and you may forfeit them.

Whether you paid gas matters, because spending crypto on gas is itself a disposal.

How the ATO taxes airdrops

The ATO splits airdrops into two categories, and this is the single most important distinction for Australian readers.

Established-token airdrops: ordinary income on receipt

If the token already had a market before the airdrop, its AUD market value when you receive it is ordinary income, taxed at your marginal rate. That value becomes your cost base for any later disposal.

Example. Mia receives 1,000 tokens of an established project worth AUD 500 on arrival. She declares AUD 500 as income; her cost base is AUD 500.

Initial allocation airdrops: no income on receipt

If there was no trading in the project's tokens before the airdrop, you do not derive income or make a capital gain on receipt. Free tokens have a nil ($0) cost base; if you paid something, the cost base is what you paid. CGT applies later, on disposal.

On disposal: capital gains tax

Selling, swapping or disposing of airdropped tokens is a CGT event. Gain or loss = AUD proceeds minus cost base. Held 12 months or more as an individual, eligible gains qualify for the 50% CGT discount.

Example. Mia later sells the 1,000 tokens (cost base AUD 500) for AUD 750: a AUD 250 gain. Held 12+ months, only AUD 125 is assessable.

How to report airdrops

Established-token airdrop income goes in your return as other income for the year received; disposal gains go through the capital gains section. Self-lodgers file by 31 October; a registered tax agent generally buys more time.

Working out cost base

Cost base is the AUD value when the tokens first came under your control. Summ (formerly Crypto Tax Calculator) calculates this across every connected wallet and exchange.

Gas fees

Spending crypto on gas to claim is itself a disposal of the gas token (a gain or loss), and the gas cost can form part of your cost base. Summ categorises gas and airdrop transactions for you.

NFTs and airdrops

NFT airdrops follow the same logic, but because NFTs are unique you can't just look up a price. You may need a reasonable valuation of the AUD market value at receipt, which becomes the cost base for a later sale.

Common airdrop tax issues in Australia

Scam airdrops. Unsolicited tokens, sometimes with an inflated on-paper value. In Summ, categorise them as Ignore > Spam so they don't distort your position.

Price falls before you sell. For established-token airdrops you're assessed on the value at receipt even if the price later collapses; a later sale at a lower price produces a capital loss, which offsets capital gains, not your salary.

Worthless airdrops. A drop with genuinely no value doesn't add to your income.

FAQs

Do you pay tax on airdrops in Australia? Sometimes on receipt, always potentially on disposal. Established tokens are income at AUD market value when received; initial allocation airdrops aren't income on receipt but carry a nil cost base for CGT later.

This article is general information, not tax advice. For your circumstances, speak to a registered tax agent.