Tax Rebate on Charity Donations



Vision Direct
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At tax return time in Australia, July to October, many people will be checking to see what they donated to charities during the previous financial year.

Most donations of over $2 will be able to be set of in the tax return, as a deductible expense against taxable income.

This means that an average taxpayer, who donates $100, and has a top tax rate of 30%, is able to claim a tax deduction of $30 in regard to their charity donation. The effect of this is that the Charity gets the full $100 paid for by the donors net $70 and $30 from the overall Australian taxpayers pool of Income Tax received by the ATO.

Higher paid individuals, who may be on the 45% tax bracket, would get $45 rebated from their $100 donation, leaving then with a net cost of $55.

A few words of caution:

  • Your donation must be $2 or more.
  • You must have a receipt.
  • The charity must be endorsed as a Deductible Gift Recipient (DGR) by the ATO otherwise your deduction may be disallowed.

For people who donate large amounts, a number use the Charities Aid Foundation (CAF) to manage their giving, more details at: www.cafaustralia.org.au


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Through CAF’s operations in Australia during 2008-09, more than $AU20 million was granted to recognised Deductible Gift Recipient charitable and not-for-profit organisations across Australia and South East Asia.

Even larger donors, with $500,000+ available for donations can set up a Private Ancillary Fund. This allows the fund to earn tax free income, but must distribute at least 5% of the fund each year to recognised organisations.
Details at: http://ato.gov.au


Other options for Donations, but with no tax rebates, include raffles such as these, where the ticket buyer is contributing to a charity, but also getting a chance of winning a house.

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