How much tax do you pay on shares in Australia?

The short answer: it depends on your income. Capital gains tax in Australia is not a separate tax with its own rate. Your net capital gain gets added to your assessable income for the year and taxed at your marginal rate. Someone on $40k pays a very different amount than someone on $200k for the exact same share sale.

2025-26 tax rates

Following the Stage 3 tax cuts (as of early 2026), the individual income tax brackets are:

Most taxpayers also pay the 2% Medicare levy, bringing the effective top rate to 47%.

Same profit, different tax bills

You sell shares for a $15,000 capital gain. You held them over 12 months, so the 50% CGT discount applies, making $7,500 assessable.

On a $40,000 salary: Most of the gain falls in the 16% bracket, with $2,500 spilling into the 30% bracket. Total tax on the gain: roughly $1,700.

On a $90,000 salary: The entire $7,500 sits in the 30% bracket. Total tax: roughly $2,400.

On a $200,000 salary: The entire $7,500 sits in the 45% bracket. Total tax: roughly $3,525.

That is a $1,825 spread on the same profit. Your marginal rate matters enormously.

Without the CGT discount

If you held those shares for less than 12 months, no discount. The full $15,000 is assessable. On a $90,000 salary, that means roughly $4,800 in tax instead of $2,400. The 50% discount effectively halves your tax bill. For a deeper comparison, see short-term vs long-term capital gains in Australia.

Franked dividends

Most large ASX companies pay franked dividends, and the franking credit system is genuinely generous. A fully franked $700 dividend from a company taxed at 30% comes with a $300 franking credit. You gross up the dividend to $1,000, calculate tax on that, then subtract the $300 credit as a tax offset.

If your marginal rate is 30% (plus Medicare), you pay just $20 in net tax on that $700 dividend. If your rate is below 30%, the ATO refunds the excess credits to you.

Unfranked dividends get no offset. The full amount is taxed at your marginal rate.

ETF distributions

ETFs like VAS, VGS, and VDHG distribute income with multiple components: franked dividends, unfranked dividends, foreign income, capital gains, and tax-deferred amounts. Your ETF provider issues an annual AMMA statement breaking it all down. Each component gets different tax treatment on your return. If you hold several ETFs making quarterly distributions, that is a lot of line items to track.

Capital losses offset gains

Sold some shares at a loss? Those losses offset your gains before tax is calculated. $8,000 in gains minus $3,000 in losses = $5,000 net gain. Apply the 50% discount if eligible, and you are taxed on $2,500, not $8,000.

Losses exceeding gains carry forward indefinitely. You cannot deduct net capital losses against salary or other income. For more detail, see how to calculate capital gains on shares in Australia.

Keeping track of it all

Between capital gains, dividends, franking credits, and ETF distributions, there are a lot of moving parts. The ATO pre-fills much of it in myTax, but you should verify those figures against your own records.

TrackMyShares helps by tracking your cost base and capital gains automatically, classifying gains as short-term or long-term, tracking dividends including franking credits, projecting dividend income with the dividend calendar, and generating tax reports you can share with your accountant.

For a complete overview of setting up your portfolio, see how to track your shares in Australia.

Sign up for free and take control of your share tax reporting with TrackMyShares.

This is general information, not personal tax or financial advice.