The following information is provided as a convenience and has been sourced from the Australian Tax Office website. Any links below will open in a new window on the ATO website.
Gifts and donations
The ATO allows for deductions relating to gifts and donations based on the following conditions. The information below is taken straight from the ATO’s website which can be found here. I f for any reason you are not sure then you should seek help from a tax specialist.
You can only claim a tax deduction for gifts or donations to organisations that have the status of deductible gift recipients (DGRs).
The person that makes the gift (the donor) is the person that can claim a deduction.
On this page:
- What is a DGR?
- When a gift or donation is deductible
- What you can claim
- What you can’t claim
- Keeping donation records
For a summary of this content in poster format, see Gifts and Donations (PDF, 548KB)This link will download a file.
A deductible gift recipient (DGR) is an organisation or fund that registers to receive tax deductible gifts.
Not all charities are DGRs. For example, in recent times crowdfunding campaigns have become a popular way to raise money for charitable causes. However, many of these crowdfunding websites are not run by DGRs. Donations to these campaigns and platforms are not deductible.
You can check the DGR status of an organisation at ABN Look-up: Deductible gift recipientsExternal Link.
To claim a tax deduction for a gift or donation you make, it must meet the following four conditions. The gift or donation:
- must be made to a DGR
- must truly be a gift or donation – that is, you are voluntarily transferring money or property without receiving, or expecting to receive, any material benefit or advantage in return. A material benefit is an item that has a monetary value
- must be of money or property – this can include financial assets such as shares
- must comply with any relevant gift conditions – for some DGRs, the income tax law adds extra conditions affecting types of deductible gifts they can receive.
If you receive a material benefit in return for your gift or donation to a DGR, it’s considered a contribution and extra conditions apply. For more information see, Is it a gift or contribution?
To claim a deduction, you must have a record of your donation such as a receipt.
The amount you can claim as a deduction depends on the type of gift:
- Gifts of money – you can claim the amount of the gift, but it must be $2 or more.
- Gifts of property or shares – there are different rules depending on the type and value of the property – see Gift types, requirements and valuation rules.
- Gifts under the Heritage and Cultural programs – there are special circumstances where donations can also be deductible – see:
If you receive a token item for your donation you can still claim a deduction. Token items are things of no material value that are used to promote the DGR, such as lapel pins, wristbands and stickers.
You can claim the deduction for your gift for the income year in which the gift was given. In certain circumstances, you can elect to spread the tax deduction over a period of up to five income years – see When can I claim?
If you made donations of $2 or more to bucket collections – for example, to collections conducted by an approved organisation for natural disaster victims – you can claim a tax deduction for gifts up to $10 without a receipt. To claim contributions of more than $10, you need a receipt.
Political party and independent candidate donations
In some circumstances, your gifts and donations to registered political parties or independent candidates may be claimed as a deduction.
This includes paying a membership subscription to a registered political party. You must have made the gift or donation as an individual (not in the course of carrying on a business) and it can’t be a testamentary donation.
Your gift or donation must be worth $2 or more. If the gift is property, the property must have been purchased 12 months or more before making the donation.
The most you can claim in an income year is:
- $1,500 for contributions and gifts to political parties
- $1,500 for contributions and gifts to independent candidates and members.
To claim a deduction, you must have a written record of your donation.
You can’t claim gifts or donations that provide you with a personal benefit, such as:
- raffle or art union tickets – for example, an RSL Art Union prize home
- items such as chocolates, mugs, keyrings, hats or toys that have an advertised price
- the cost of attending fundraising dinners, even if the cost exceeds the value of the dinner. You may be eligible to claim a deduction as a contribution if the cost of the event was more than the minor benefit supplied as part of the event.
- club membership fees
- payments to school building funds made in return for a benefit or advantage – for example, as an alternative to an increase in school fees or placement on a waiting list
- payments where you have an understanding with the recipient that the payments will be used to provide a benefit to you
- gifts to family and friends, regardless of the reason
- donations made under a salary sacrifice arrangement
- donations made under a will.
You can’t claim a tax deduction for donations made to social media or crowdfunding platforms unless they are a registered DGR.
Example – material benefits where a deduction can’t be claimed
Robbie is an office worker. Each year his workplace gets involved in the Daffodil day appeal to raise money and awareness for the Cancer Council. Robbie buys a teddy bear toy on Daffodil Day at a cost of $30.
Robbie can’t claim a deduction for the cost of the toy as he has received a material benefit in return for his contribution to the Cancer Council.
End of example
Example – no deduction for donating partially refunded membership fee to non-DGR
Ruby buys an annual membership for $100 for her football club in January 2020. Her membership included a season pass to attend home games as well as discounted food and drink at club bars and restaurants. Due to the physical distancing requirements put in place as a result of the COVID-19 pandemic, the 2020 season was cancelled after round two and club venues had to close.
The football club offers members a refund of $85, taking into account the fact that some benefits of their membership have been used in the short season. Ruby chooses to donate her $85 refund back to her club to support them. Ruby can’t claim a tax deduction for this donation as her football club is not endorsed as a deductible gift recipient (DGR).
End of example
Example – claiming partially refunded memberships as donations
Unlike Ruby, Gary decides to donate his partially refunded membership to the Australian Sports Foundation (ASF), which is a DGR, via his football club. Gary is provided with a receipt from the ASF for the amount of his donation and can claim an $85 tax deduction.
While Gary may nominate as a preferred beneficiary an ASF project that supports his football club, the ASF has absolute discretion as to how the donation is allocated and may choose to allocate the donation to a different ASF project.
End of example
You should keep records for all tax deductible gifts and contributions you make.
When you donate the DGR will usually issue you with a receipt, although they are not required to. In these circumstances you can still claim a deduction by using other records, such as bank statements.
If a DGR issues a receipt for a deductible gift, the receipt must state:
- the name of the fund, authority or institution to which the donation has been made
- the DGR’s Australian business number (ABN) (some DGRs listed by name in the law may not have an ABN)
- that the receipt is for a gift.
If you give through a workplace giving program your income statement, payment summary or a written record from your employer is sufficient evidence.
You can use the myDeductions tool in the ATO app to keep track of your expenses and receipts throughout the year. It’s a fast, easy way to capture information on the go by taking and uploading photos of receipts. If you have an electronic copy of your receipts that are a true and clear reproduction of the original, you’re not required to keep the original paper copy.