How to Calculate CGT on Shares in Australia (2026)

If you've sold shares at a profit, you owe capital gains tax. This guide walks through exactly how CGT works on Australian shares, with real numbers, current FY2024-25 tax brackets, and the mistakes that cost investors money every tax season.

This is for Australian tax residents who hold shares in their own name (not via a trust or SMSF) and want to understand what they'll owe before lodging their return.

Key takeaways

• Capital gains are added to your taxable income and taxed at your marginal rate -- there is no flat CGT rate.
• Hold for at least 12 months and you get a 50% discount on the gain.
• Your cost base includes brokerage fees, not just the purchase price.
• Capital losses can only offset capital gains, but they carry forward indefinitely.
• Track every parcel separately. The ATO does.

What is CGT?

Capital gains tax is not a separate tax. It is part of your income tax. When you sell an asset for more than you paid, the profit (your capital gain) gets added to your assessable income for the financial year. You then pay tax on it at your marginal rate.

CGT applies to shares, ETFs, property, crypto, and most other investment assets. It does not apply to assets you acquired before 20 September 1985, personal use assets under $10,000, or your main residence (in most cases).

The key point: CGT is triggered by a CGT event. The most common event is selling shares (CGT event A1). It also includes things like having shares cancelled, redeemed, or transferred. Until you sell, there is no CGT liability -- unrealised gains do not count.

How to calculate your capital gain

The formula is straightforward:

Capital gain = Capital proceeds - Cost base

Let's work through a realistic example.

Worked example: Selling VAS units

You bought 500 units of Vanguard Australian Shares ETF (VAS) on 5 March 2024 at $82.00 per unit. Brokerage was $9.50 each way.

On 10 July 2025, you sell all 500 units at $95.00 per unit. That is a holding period of over 12 months, so the 50% CGT discount applies.

Step 1: Calculate your cost base

Step 2: Calculate capital proceeds

Capital proceeds = 500 x $95.00 = $47,500.00

Step 3: Calculate the gross capital gain

$47,500.00 - $41,019.00 = $6,481.00

Step 4: Apply the 50% CGT discount

You held the shares for more than 12 months, so:

$6,481.00 x 50% = $3,240.50

This $3,240.50 is added to your other taxable income for the year. If your salary is $90,000, your total taxable income becomes $93,240.50, and the gain is taxed at your marginal rate for that bracket.

The 50% CGT discount

If you hold an asset for at least 12 months before selling, you only include half the capital gain in your assessable income. This is one of the most valuable concessions in the Australian tax system.

The rules:

• Individuals and trusts qualify for the 50% discount.
• Companies do not qualify. They pay CGT on the full gain at the company tax rate.
• SMSFs get a one-third discount (33.33%), not 50%.
• The 12-month period is measured from the day after acquisition to the day of the CGT event (sale). If you bought on 1 July 2024, the earliest you can sell with the discount is 2 July 2025.
• Apply capital losses first, then the discount. This is a common mistake. You reduce the gain by any capital losses, and the 50% discount applies to the remaining net gain.

How CGT is taxed at your marginal rate

There is no flat "CGT rate." Your net capital gain is stacked on top of your other income, and whatever bracket it falls into determines the tax rate.

Here are the current FY2024-25 individual tax brackets (which also apply to FY2025-26 under Stage 3 tax cuts):

Plus the 2% Medicare levy on your entire taxable income.

What this means in practice

Using our VAS example: you earned $90,000 in salary and have a discounted capital gain of $3,240.50. Your total taxable income is $93,240.50, which sits in the $45,001-$135,000 bracket.

Tax on the capital gain: $3,240.50 x 30% = $972.15 (plus Medicare levy).

If your salary were $140,000 instead, part of the gain would be taxed at 37%. The marginal rate matters -- it is whatever bracket the top dollar of your income falls into.

Cost base: what you can include

Your cost base is not just the purchase price. The ATO allows five elements:

1. Money paid for the asset -- the purchase price of the shares.
2. Incidental costs of acquisition and disposal -- brokerage fees on both the buy and sell side, plus any legal or accounting fees directly related to the transaction.
3. Costs of owning the asset -- for shares, this is rarely applicable (it covers things like interest on money borrowed to acquire the asset, but only for assets acquired after 20 August 1991 and only if the deduction has not already been claimed elsewhere).
4. Capital costs to increase or preserve value -- calls on partly paid shares, for example.
5. Capital costs of establishing, preserving, or defending title -- legal costs if ownership was disputed.

For most share investors, it comes down to: purchase price + buy brokerage + sell brokerage.

Do not include amounts you have already claimed as a tax deduction (e.g. interest on a margin loan claimed as an investment expense). That would be double-dipping.

Capital losses

If you sell shares for less than your cost base, you have a capital loss.

The rules are simple but strict:

• Capital losses can only be offset against capital gains. You cannot use them to reduce your salary, rental income, or any other type of income.
• If your capital losses exceed your capital gains in a financial year, the excess carries forward indefinitely. There is no time limit.
• You must apply losses before applying the 50% CGT discount. This means losses effectively reduce gains at their full value, which is worth more than reducing the discounted amount.
• Wash sale warning: The ATO watches for "wash sales" where you sell at a loss and immediately repurchase the same or substantially similar asset. If the dominant purpose was to create a tax loss, the ATO can deny it.

Example

You have a $6,481 capital gain from VAS and a $2,000 capital loss from selling CBA shares.

Net capital gain: $6,481 - $2,000 = $4,481

After 50% discount: $4,481 x 50% = $2,240.50 assessable

The loss reduced the gain before the discount was applied, saving you more tax than if the order were reversed.

Common mistakes

Forgetting brokerage in the cost base. Every dollar of brokerage you exclude from your cost base is a dollar of gain you pay tax on unnecessarily. $9.50 each way across 20 trades a year adds up. Keep your broker statements.

Miscounting the 12-month holding period. The period runs from the day after you acquire the shares, not the day of acquisition. Selling one day too early means losing the 50% discount on the entire gain. On a $10,000 gain, that is $1,500-$2,250 in extra tax depending on your bracket. Check the dates carefully.

Not tracking parcels. If you bought VAS in three separate lots at three different prices, each lot is a separate parcel with its own cost base and acquisition date. The ATO uses a first-in-first-out (FIFO) method by default when parcels are not specifically identified. If you sell 200 units but bought 100 in January 2024 and 100 in August 2024, the January parcel qualifies for the discount but the August one might not. Track every parcel.

Ignoring DRP (dividend reinvestment plan) parcels. Every dividend reinvestment creates a new parcel with its own cost base and acquisition date. If you have been on a DRP for five years, you could have 20+ separate parcels. Each one needs to be tracked individually.

Applying the discount before losses. As shown above, losses must be subtracted first. Getting this wrong means under-reporting your gain and potentially facing ATO penalties.

Forgetting corporate actions. Share splits, consolidations, demergers, and return of capital events all affect your cost base. A return of capital reduces your cost base (increasing your future CGT), even though it is not taxable income when received.

Calculate your CGT in seconds

Doing this manually across multiple holdings, parcels, and financial years gets complex fast. Especially if you hold ETFs, individual shares, and have DRP parcels scattered across different dates.

Try Grove's free CGT calculator -- punch in your buy price, sell price, income, and holding period. It shows your exact capital gain, the discount applied, and the tax you will owe at your marginal rate. No sign-up required.

This guide is for general information only and does not constitute financial or tax advice. Tax rules can change -- always check the ATO website or consult a registered tax agent for advice specific to your situation. Tax brackets referenced are FY2024-25 rates under Stage 3 reforms.