Australia Insurance Tax Guide
Australian insurance taxation. The guide covers: the stamp duty on the insurance (the "insurance stamp duty") — the stamp duty is the state-based tax on the insurance premiums; the stamp duty rates vary by the state and the territory and by the type of the insurance; the general stamp duty rates for the 2025-26 year: (a) the "NSW": 5% on the general insurance (the "fire insurance" at 9%, the "motor vehicle insurance" at 5%, the "home building and the contents insurance" at 5%), (b) the "VIC": 10% on the general insurance (the "fire and the EC insurance" at 10%, the "motor vehicle insurance" at 10%, the "home building and the contents insurance" at 10%), (c) the "QLD": 9% on the general insurance (the "fire insurance" at 8%, the "motor vehicle insurance" at 4%, the "home insurance" at 4%), (d) the "WA": 9% on the general insurance (the "fire insurance" at 9%, the "motor vehicle insurance" at 5.5%, the "home insurance" at 5.5%), (e) the "SA": 10% on the general insurance (the "fire insurance" at 10%, the "motor vehicle insurance" at 4.5%, the "home insurance" at 4.5%); the stamp duty on the "life insurance" (the "life insurance stamp duty") is generally NOT imposed (the "exemption for the life insurance") in most states; the stamp duty on the "health insurance" (the "health insurance stamp duty") is also generally NOT imposed (the "health insurance exemption"); the GST on the insurance premiums — the GST at 10% applies to the "general insurance premiums" (the "insurance premiums" for the "general insurance" — the "car insurance", the "home insurance", the "travel insurance", the "business insurance"); the GST does NOT apply to the "life insurance premiums" (the "life insurance" is the "input-taxed supply" — the GST is NOT charged on the life insurance premiums); the "health insurance premiums" are also the "GST-free" (the "health insurance" is the "GST-free supply"); the FBT on the insurance provided to the employees — the employer can provide the "insurance benefits" to the employees; the FBT treatment depends on the type of the insurance: (a) the "health insurance" (the "private hospital cover" and the "extras cover") provided by the employer is the "exempt fringe benefit" (the "health insurance is FBT-exempt" — the employer does NOT pay the FBT on the health insurance premiums paid for the employees), (b) the "life insurance" provided by the employer is the "exempt fringe benefit" if the "total amount of the exempt benefits" does NOT exceed the "minor benefits threshold" ($300 per benefit) AND the benefit is provided "infrequently" AND the benefit is NOT the part of the "salary sacrifice arrangement", (c) the "general insurance" (the "car insurance", the "home insurance") provided by the employer is the "fringe benefit" — the employer pays the FBT at 47% on the "grossed-up taxable value" of the premium; the tax treatment of the insurance claims — the "insurance claim receipts" (the "insurance proceeds") are generally: (a) the "assessable income" if the insurance covers the "loss of the business income" (the "business interruption insurance" — the "revenue insurance"), (b) the "capital receipt" if the insurance covers the "loss of the business asset" (the "asset insurance" — the "replacement of the destroyed asset" — the insurance proceeds reduce the "cost base" of the asset for the CGT purposes); the "insurance premiums" (the "business insurance premiums") are generally deductible as the "business expenses" under the Section 8-1. All amounts in Australian Dollars (AUD). For related reading, see our Business Expenses Guide → and Fringe Benefits Tax Guide →.
Stamp Duty — Insurance by State
- NSW — 5% general: The stamp duty on the general insurance in NSW is 5% (the fire insurance at 9%). The motor vehicle insurance, the home building and the contents insurance at 5%.
- VIC — 10% general: The stamp duty on the general insurance in VIC is 10% (the fire and the EC insurance at 10%, the motor vehicle insurance at 10%, the home building and the contents insurance at 10%).
- QLD — 9% general: The stamp duty on the general insurance in QLD is 9% (the fire insurance at 8%, the motor vehicle insurance at 4%, the home insurance at 4%).
- WA — 9% / SA — 10%: The stamp duty on the general insurance in WA is 9% and in SA is 10%.
For the GST on the insurance and the input-taxed supplies, see our GST Guide →.
Insurance Claims — Tax Treatment
- Business interruption — assessable: The insurance proceeds for the "loss of the business income" (the "business interruption insurance" or the "revenue insurance") are included in the "assessable income". The premiums are deductible. The taxpayer may be eligible for the "insurance loss" carry-back or the "offset" under the specific provisions.
- Asset loss — capital: The insurance proceeds for the "loss of the business asset" (the "asset insurance" — the "fire, the flood, the theft") are the "capital receipts". The proceeds reduce the "cost base" of the asset for the CGT purposes. If the proceeds exceed the cost base, the capital gain is subject to the CGT.
For the FBT on the insurance provided to the employees and the exemptions, see our Fringe Benefits Tax Guide →.