According to the 2025 Independent Reserve Cryptocurrency Index, nearly one-third of Australian businesses are ready to, or will soon, accept crypto payments. Most of these are not crypto companies. Instead, they are cafes, retailers, and other businesses choosing to accept crypto alongside cash and card payments.
However, crypto used in a business is not taxed the same way as crypto held by an individual investor. Whether it counts as trading stock, ordinary income, or a capital gains tax (CGT) asset depends on how the business acquires, holds, and disposes of the crypto, not on what kind of business is running it.
Key Takeaways
- Crypto used in a business can be trading stock, income, or a CGT asset.
- Whether you are running a business helps decide how your crypto is taxed.
- For trading stock, the purchase cost is deductible and sale proceeds are taxable income.
- Crypto received for services is income first and a CGT asset afterwards.
- Paying staff in crypto still requires normal payroll rules unless a salary sacrifice agreement applies.
Where Does Your Business's Crypto Actually Sit?
Crypto held in a business sits in one of three places. Which one it sits in decides everything about how it gets taxed. That includes what counts as income, and what you can deduct.
Crypto Used In A Crypto Asset Business
If your business involves activities such as trading crypto, mining, running an exchange, or selling non-fungible tokens (NFTs), the crypto you use may be treated as trading stock.
Crypto Used To Exchange Goods Or Services In Your Business
You do not need to run a crypto asset business for crypto to be treated as trading stock. If your business accepts or uses crypto as payment for goods or services in its normal operations, that crypto can also be treated as trading stock, regardless of what type of business you run.
Crypto Held As A Business Investment
On the other hand, crypto held as an investment is not treated as trading stock. Instead, it is generally treated as a capital gains tax (CGT) asset, with any capital gain or loss recognised when a CGT event occurs. The resulting gain or loss is then included when working out the business’s net capital gain or loss.
Are You Running A Crypto Business Or Just Investing?
Indicator | Points Toward a Business | Points Toward an Investment |
Purpose | Commercial, profit-driven activity | Personal wealth accumulation |
Planning | Business plan, organised approach | No formal plan or structure |
Records | Business-style recordkeeping kept | Basic transaction records only |
Activity | Regular, repeated transactions | Occasional buying and selling |
Asset acquisition | In line with a business plan | Ad hoc, opportunistic purchases |
Deciding factor | Combination of the above | Combination of the above |
Note: Tax treatment depends on how you acquire, hold, and dispose of the asset. This happens under CGT rules rather than business ones. If that is where your activity sits, our complete guide to crypto tax in Australia covers those tax rules in detail.
How Trading Stock Works For Businesses Dealing In Crypto?
Trading stock treatment reaches further than genuine crypto-asset businesses. Any other business exchanging goods or services for crypto in the ordinary course of trade falls under it too, changing both sides of the ledger the same way.
Acquisition Cost As A Deductible Expense
First, the cost of acquiring crypto held as trading stock is generally deductible. You can claim this cost when the crypto is acquired rather than waiting until you eventually sell it.
Sale Proceeds As Assessable Ordinary Income
When you sell or dispose of the crypto, the proceeds are treated as assessable ordinary income. This is different from how an investor is generally taxed, where tax applies to the capital gain rather than the ordinary income.
Valuing Crypto Trading Stock At Year End
Finally, any crypto still held as trading stock at the end of the financial year must be valued. One accepted approach is to use the fair market value published by a reputable crypto asset exchange.
This year-end valuation is then taken into account when calculating your assessable income, even if you have not yet sold the crypto.
How Crypto Received As Payment for Services Is Taxed?
When a business receives crypto as payment for the services it provides, the crypto is first treated as ordinary income. The amount of income is based on the crypto’s market value when the business receives it.
Ordinary Income Tax On Receiving Crypto As Payment For Services
The business must work out the crypto’s market value when the income is derived. This can be based on its market value on a reputable crypto exchange at that time. That value is included as the business’s ordinary income liable for income tax.
Capital Gains Tax On Disposing Cryptocurrency Received As Payment
After the crypto is treated as income, its fair market value (FMV) at that time becomes its cost base. If the business later sells, swaps, or otherwise disposes of the crypto, any difference between its cost base and its value at disposal is then considered for CGT purposes.
How Paying Salary Or Wages in Crypto Is Taxed?
Paying employees in crypto follows a different set of tax rules from crypto held as trading stock or an investment. The treatment depends largely on whether the crypto is provided under an effective salary sacrifice arrangement or as ordinary salary or wages.
Crypto Under A Valid Salary Sacrifice Arrangement
Say an employee has a valid salary sacrifice arrangement to receive crypto instead of dollars. That payment is a fringe benefit. It is treated as a property benefit, valued at the time it is provided.
Crypto Paid Without A Salary Sacrifice Arrangement
Without a valid salary sacrifice arrangement, a different treatment applies. The employee is treated as having received their normal salary or wages instead. The employer still needs to meet ordinary Pay As You Go (PAYG) withholding and superannuation obligations.
This applies even where an employee has already earned wages. They might simply ask to be paid in crypto afterward. That request alone does not create a valid arrangement.
Working Out The FBT Payable
Working out Fringe benefits tax (FBT) means grossing up the taxable value of the benefit first. That grossed-up value is then taxed at the FBT rate, currently 47%. The employer can generally claim an income tax deduction for the cost of the benefit. A deduction is also available for the FBT paid on it. This applies provided the usual deduction rules are met.
Keeping these three categories separated gets easier with the right system in place. That is exactly where KoinX fits in.
How Can KoinX Help Businesses Track Trading Stock and Ordinary Income?
Trading stock, service income, and salary benefits all need separate, defensible records, kept apart from each other. KoinX brings every transaction into one place, tagged from the moment it lands. That foundation is what the four features below actually deliver.
Complete Australian Taxation Office Tax Report
A Complete ATO Tax Report applies the tax rules directly to your data. It covers income, portfolio balances, and disposal events in one place. Trading stock proceeds and service payments both stay traceable back to their original transaction.
Buy Sell Report
The Buy-Sell Report lets you review every buy, sell, and swap in one place, so you can verify trading activity and spot issues before generating your final crypto tax reports. It catches a missing disposal before it distorts your figures for the year.
Transaction History Report
The Transaction History Report acts as a full ledger of trades, transfers, rewards, and fees, giving you the raw data behind every calculated report. This matters when a business pays suppliers, takes client payments, or holds stock across several platforms.
Get started with KoinX today, and keep your trading stock, service income, and salary benefits properly separated from day one.
The real risk sits with businesses that never actually asked this question in the first place. A crypto balance sitting in a business account gets harder to unpick the longer it stays unclassified. An amended return, once data matching catches up, costs more than getting it right the first time.
Start by pulling your crypto transaction history and checking it against these three categories today. Get started with KoinX, and keep every category properly separated before your next reporting period closes.
Frequently Asked Questions
Is GST Charged On Crypto Trading Stock Sales?
No. Selling digital currency itself is either input-taxed or GST-free, never a taxable supply that attracts GST. Selling to an Australian resident is input-taxed. Selling to someone overseas, or through an offshore exchange, is GST-free instead.
How Do I Know If My Crypto Activity Counts As A Business?
The ATO weighs commercial purpose and profit intention together, alongside how organised and repeated the activity is. No single factor decides it on its own, and transaction size or frequency alone doesn’t settle the question either.
Does Trading Stock Treatment Apply To Every Business That Holds Crypto?
No. Trading stock treatment applies once your crypto activity meets the business test. This holds whether through a crypto asset business, or through exchanging goods or services for crypto. A business investment stays on the CGT side instead.
Do I Pay Tax On The Full Sale Price Of Trading Stock Crypto Or Just The Profit? T
The full sale proceeds count as ordinary income, not just the profit margin. This differs from investment treatment. There, CGT applies only to the net gain on disposal, not the total amount received.
Does Paying An Employee In Crypto Always Trigger FBT?
Only if a valid salary sacrifice arrangement exists first. Without one, the payment is treated as ordinary salary or wages instead. Standard PAYG withholding and superannuation obligations apply, rather than FBT.
