Gifts and Donations: What Is Tax Deductible?

Most of us give something away during the year: a donation to a charity appeal, a payroll deduction to a cause we care about, a round-up at the supermarket checkout, or a few dollars in a collection bucket. It feels good, and in many cases it can also reduce your tax bill. But "donation" and "tax deductible" are not the same thing. The Australian Taxation Office (ATO) has specific rules about which gifts count, and getting it wrong is one of the easiest ways to have a deduction knocked back or flagged for a closer look. This guide explains exactly what you can and can't claim for the 2025-26 income year.

Why This Matters

Claiming gifts and donations correctly matters for two reasons. First, it is real money: every dollar of an eligible donation reduces your taxable income, which can lower the tax you pay or increase your refund. Second, donation claims are a common trigger for ATO reviews. Giving to an organisation without deductible gift recipient (DGR) status, claiming something you received a benefit for like a raffle ticket or a dinner, or claiming without a receipt are all easy mistakes, and all easy to fix once you know the rules.

Who This Applies To

This applies to any individual taxpayer who has made a genuine gift or donation during the year. It is especially relevant if you:

• Donate to charities or appeals, one-off or regularly
• Give through your employer's workplace giving program
• Support fundraising dinners, events or raffles
• Donate shares or property to an eligible organisation
• Donate to a registered political party or independent candidate

Key Rules for the 2025-26 Income Year

The Organisation Must Be a Deductible Gift Recipient (DGR)

You can only claim a deduction for a gift made to an organisation with DGR status, either endorsed by the ATO or listed by name in tax law. Not every charity is a DGR, and most crowdfunding campaigns (GoFundMe and similar) aren't either. Before you donate, or before you claim, check the organisation's status using the ABN Lookup DGR listing. If it shows "endorsed" or "listed", you are covered. If it shows "not entitled", you can't claim it.

It Has to Be a Genuine Gift

A deductible gift must be voluntary, and you must not receive anything of material value in return. That rules out raffle tickets, auction items bought at a fundraiser, or the cost of a charity dinner ticket (special rules apply to some fundraising events, see below). Small token items like a lapel pin, wristband or sticker don't count as a material benefit, so the donation itself is still deductible.

Types of Gifts You Can Claim

• Money: gifts of $2 or more to an eligible DGR
• Shares: shares listed on an approved stock exchange, valued at $5,000 or less, and held for at least 12 months before donating
• Larger property gifts: property the ATO values at more than $5,000 can have the deduction spread over up to 5 income years
• Workplace giving: donations deducted straight from your pay; your income statement or a written record from your employer is your evidence
• Bucket donations: cash donations of $2 or more each can be claimed up to a total of $10 for the year without a receipt; above $10 you need one
• Fundraising events: net contributions of more than $150 can be deductible in some circumstances

Political Donations

Gifts of $2 or more to a registered political party or an independent candidate or member can also be deductible, capped at $1,500 a year for political parties and $1,500 a year for independents. These must be made by you as an individual, not through a business, and you need a written record.

Records You Need

Keep a receipt, a signed letter from the organisation, a bank or credit card statement, or your income statement for workplace giving.

Spreading Larger Gifts Over Time

A donation deduction can't create or add to a tax loss; it can only reduce your taxable income to nil for that year. If your gift is large compared to your income, you can elect, before you lodge, to spread the deduction over up to 5 income years.

Point-of-Sale and Pledge Donations

Some retailers collect donations for a DGR at the checkout, such as rounding up your total or adding a dollar for a cause. These can be deductible if the retailer is genuinely collecting on behalf of a DGR, so check the name of the organisation and keep your receipt. The same goes for written pledges, such as signing a contribution form at a fundraising event: you can claim the portion of your pledge that actually goes to the named DGR.

Common Mistakes to Avoid

• Assuming crowdfunding donations are deductible; most platforms aren't run by DGRs
• Claiming raffle tickets, auction purchases or fundraising dinner tickets as straight donations
• Donating to family or friends and trying to claim it. Gifts to individuals are never deductible
• Forgetting that donations made under a salary sacrifice arrangement can't also be claimed as a deduction
• Claiming more than $10 of bucket donations without a receipt
• Not checking DGR status before donating, then finding out afterwards the gift isn't deductible
• Trying to claim a donation made under a will (a testamentary donation)

Practical Example

Maria, a nurse in Brisbane, donates $50 a fortnight through her employer's workplace giving program to the Cancer Council, a registered DGR, that is $1,300 over the year. She also buys a $20 raffle ticket at a work morning tea and drops $15 in cash into bucket collections across three different street appeals during the year.

Maria can claim the $1,300 in workplace giving, verified by her income statement. She can also claim $10 of her bucket donations without a receipt; even though she gave $15, only $10 is claimable without proof, so she would need a receipt for the rest. She can't claim the $20 raffle ticket at all, because she received something (a chance to win a prize) in return.

Maria's total deductible gifts and donations for the year: $1,310.

You can only claim a gift to an organisation with deductible gift recipient (DGR) status, and most crowdfunding campaigns aren't DGRs.

Key Takeaways