Do You Get Taxed on Lottery Winnings? | theLotter Australia
 
 
 

Do You Get Taxed on Lottery Winnings in Australia?

The last thing you want to think about after winning the lottery is paying taxes. Before you get a chance to decide if you want to share your prize with family or relatives, you will have to share it with the state. In most countries, lottery prizes are taxable, and the state usually takes quite a large portion of the prize. But what about in Australia, do you get taxed on lottery winnings here?

Australia is one of the very few countries where lottery winnings are tax-free. If you win one of the Aussie lotteries, the state will not take up a single dollar of your money. But what happens if an Australian citizen wins an overseas lottery? Which taxation laws apply in this case? In this article, we are going to tell you about the taxation process for both local and international lotteries. Take a look!

Are Lotto Winnings Tax-Free in Australia?

According to Australian gambling laws, lottery winnings are non-taxable. This applies to prizes won in the local lotteries, but also to prizes that Australian citizens have won in other countries. This makes Australians some of the luckiest lottery players in the world. Getting the full amount of your lotto prize is certainly not a luxury that a lot of people have.

The taxation laws that apply to lottery prizes are first and foremost those of the country organizing the game. As such, if an Australian citizen wins an overseas lottery, the prize will be taxed as per the laws of the country where it was won. Then, the prize will be declared in Australia, but no further taxes will be deducted, as per the zero lottery tax. 

Do Australians Have to Pay Taxes on Overseas Lotteries?

As we have mentioned above, the tax on lottery prize money in Australia is zero, but for prizes won in international lotteries, Aussies must also adapt to the tax and gambling laws of the country that organizes the lottery that they have won. As such, the international taxes they have to pay depend entirely on the local legislation in that country. In the following section of our article, we will give you an outline of the tax policies from around the world.

What Is the Taxation Process for US Lotteries?

As opposed to Australian lottery tax laws, which are the same in all parts of the country, each US state has its own taxation laws. This makes paying taxes on American lotteries a bit more complicated than on other international lotteries. Winners must pay taxes as per US state tax laws. In the table below, you can find summarized information about the main tax categories that apply to Australian or other non-US resident winners. We have included both state and multi-state lotteries and their individual tax policies. If you want to find out more about the American taxation laws for lottery prizes, you can read our comprehensive guide to US lottery taxes.

Lottery Tax Bands

Band 1. <$599.99 - Tax Free
Band 2. $600 - $1,499.99 - Tax = 30%
Band 3.>$1,500 - Tax = 38%

Band 1. <$599.99 - Tax Free
Band 2. $600 - $1,499.99 - Tax = 30%
Band 3.>$1,500 - Tax = 38%


Band 1. <$599.99 - Tax Free
Band 2. $600 - $4,999.99 - Tax = 30%
Band 3.>$5,000 - Tax = 38.82%



Band 1. <$599.99 - Tax Free
Band 2. $600 - $9,999.99 - Tax = 30%
Band 3.>$10,000 - Tax = 38%


Band 1. <$599.99 - Tax Free
Band 2. > $600 - Tax = 30%

What Is the Taxation Process for European Lotteries?

When Australian citizens win prizes in European lotteries, they must first pay taxes in Europe. Each country has its own taxation laws, which means that taxes vary for each European lottery you choose to play. To get an idea of the European tax rates, we have put together a table with the general taxing policies for lottery prizes across the continent.

* Non-Spanish citizens from most countries are entitled to a full tax refund to avoid double taxation. Please note that this is the responsibility of the winner and that it must be done through the Spanish tax authorities.

In the table below, you can see a list of lotteries that are considered tax-free. For the following European lotteries, the amounts displayed for the prizes are exactly what the winners will get. For some of them, the taxes have already been deducted from the initial amounts. Should Australians win any of these lotteries, they will be able to collect the entire amount of the prize.

Country Tax Bands
Italy Country Pin

Band 1. <€100 - Tax Free
Band 2. €100.01 - €300
- €1.03 Retailer Fee
Band 3. €300.01 - €500
- €3.10 Retailer Fee

Band 4. €500.01 - €1,000
€3.10 Retailer Fee and 12% Tax
Band 5. >€1,000.01
€6.20 Retailer Fee and 12% Tax
Lotto prizes are subject to a tax rate of 8%.
MillionDAY prizes are quoted and paid as net amounts, after the 8% tax has been deducted.

Italy Country Pin

Band 1. < €3,000 - Tax Free
Band 2. €3,000 - €55,000
– 23% Tax

Band 3. > €55,000
– 31.4% Tax

Poland Country Pin

Band 1. < PLN2,280
– Tax-Free

Band 2. > PLN2,280
– 10% Tax

Spain Country Pin

Band 1. <€10,000 – Tax-Free

Band 2. >€10,000 – 20% Tax

Switzerland Country Pin

Band 1. – Tax-Free

Band 2. >CHF1,000
– 35% Tax

* Non-Spanish citizens from most countries are entitled to a full tax refund to avoid double taxation. Please note that this is the responsibility of the winner and that it must be done through the Spanish tax authorities.

In the table below, you can see a list of lotteries that are considered tax-free. For the following European lotteries, the amounts displayed for the prizes are exactly what the winners will get. For some of them, the taxes have already been deducted from the initial amounts. Should Australians win any of these lotteries, they will be able to collect the entire amount of the prize.

Tax-Free European Lotteries

What Is the Taxation Process for Canadian Lotteries?

Similar to tax laws in Australia, Canadan laws declare lottery winnings tax-free. According to the official gambling laws, there are no deductions to be made. As such, if Australian citizens win any of the Canadian lotteries, they will not have to pay taxes in either Canada or Australia. This makes Canada’s lotto market extremely convenient for Australian lottery players.

How Do You Pay Taxes on Lottery Prizes Won on theLotter Australia?

If you win a prize on theLotter Australia, the taxes due are those of the countries organizing the lotteries. For most lotteries featured on our platform, these taxes are deducted during the prize collection process by the local and/or federal government of the country where the game takes place and the official lottery organizer, as per the appropriate tax band.

Only after the taxes have been deducted, theLotter pays out the post-tax amount of the prizes to the winners. Please note that we do not charge any type of commission on lottery prizes won through our platform. The only deductions made from lottery prizes will be tax requirements.

As you can see, Australia and Canada are two of the very few countries that do not feature taxes for lottery prizes. When compared to the American or the European lotto market, where most games come with strict tax policies, Aussie and Canadian lotteries present an immense advantage.

Related Stories

Show
Hide