Capital Loss Harvesting Calculator (Australia)

What capital loss harvesting means in Australia

Capital loss harvesting is the deliberate sale of an investment that is worth less than you paid, so the realised loss can be set against capital gains you have made elsewhere in the same financial year. This calculator compares two versions of your year: one where you leave the losing position alone, and one where you sell it before 30 June. The difference between the two tax figures is what the exercise is actually worth.

The number matters because the intuition is usually wrong. Most people assume a 10,000 dollar loss saves 10,000 dollars times their marginal rate. For gains on assets held more than 12 months it saves roughly half that, and understanding why is the difference between a sensible decision and a pointless one.

The order of operations is everything

The ATO method runs in a fixed sequence. First you work out each capital gain and each capital loss for the year. Second you apply the losses against the gains. Third, and only then, you apply the 50 per cent discount to the gains that qualify for it and still remain. The net capital gain that goes into your return is what comes out of step three.

Because losses are applied at step two, they reduce gross gains, not discounted ones. A dollar of loss removes a dollar of gross gain, which would have become 50 cents of taxable gain after the discount. So the taxable amount falls by 50 cents, and the tax saved is 50 cents times your marginal rate plus the Medicare levy.

Work it through with the default figures. A 20,000 dollar gain on shares held over a year becomes a 10,000 dollar taxable gain after the discount. Realising 8,000 dollars of losses cuts the gross gain to 12,000 dollars, and the taxable gain to 6,000 dollars. The taxable amount fell by 4,000 dollars, not 8,000. At a 32 per cent combined marginal rate the saving is 1,280 dollars, which is exactly what the calculator reports.

Choosing which gains to offset

Where you have both kinds of gain, the allocation is yours to choose and it changes the answer. Gains on assets held 12 months or less get no discount and are taxed dollar for dollar. Gains on assets held longer are halved. Applying losses to the undiscounted gains first therefore preserves the discount on the rest and saves more tax.

The tool lets you switch the allocation so the effect is visible. With 20,000 dollars of discountable gains, 10,000 dollars of undiscounted gains and 10,000 dollars of losses, applying the losses to the undiscounted gains first leaves a net capital gain of 10,000 dollars. Applying them to the discountable gains first leaves 15,000 dollars. Same trades, same losses, 50 per cent more taxable gain from the wrong allocation.

Carried-forward losses

Net capital losses from earlier years carry forward indefinitely and must be used before you can claim the discount on the current year's gains, in the same order as current-year losses. Entering them here changes the baseline: if last year's losses already absorb this year's gains, harvesting more today saves nothing now, and the extra losses simply join the carry-forward pool.

That is a legitimate result rather than a failure. Losses are not wasted when they carry forward, but the tax benefit is deferred, and a benefit deferred for several years is worth less than one taken today. The calculator reports the unused balance so the trade-off is explicit.

What the tax figures mean

The tax on a capital gain is not a separate rate. The net capital gain is added to your other taxable income and taxed at your marginal rates, with the Medicare levy on top. That means the same gain costs different amounts to different people, and it can push you into a higher bracket where part of the gain is taxed above your usual rate.

This calculator measures the tax on the gain as the difference between your total tax with the gain and your total tax without it, using the resident brackets, the Medicare levy and the CGT discount from stored parameters. It does not model the Low Income Tax Offset, private health insurance surcharges, or study loan repayments, each of which can shift the effective rate at particular income levels.

When harvesting is a bad idea

Three cautions matter more than the arithmetic.

• Selling purely for the tax outcome and repurchasing the same asset shortly afterwards can be treated as a wash sale and denied. The ATO has published guidance on this and enforces it.
• A loss is only worth harvesting if you were willing to be out of that position anyway, or into a genuinely different one. Tax is a secondary consideration to whether you still want to own the asset.
• Brokerage, spreads and the time out of the market are real costs that the tax saving has to beat, particularly on small parcels.

Reading the result

The output shows the tax on your gains with and without harvesting, the saving between them, the net capital gain in each case, the losses actually applied, any balance carried forward, the value of the discount you kept, and the effective tax rate on the resulting gain. The bar chart puts the two tax figures side by side with the saving, which is usually the quickest way to judge whether the exercise is worth the trouble.

Treat every figure as an estimate. Your actual outcome depends on cost base adjustments, the exact holding period of each parcel, and your final taxable income for the year, none of which a single-page calculator can capture. Speak to a registered tax agent before acting on a large realisation.

This is general information only and not financial advice.

About This Tool: Capital Loss Harvesting

Capital loss harvesting: use this tool to get an instant, accurate estimate. The figures follow official ATO guidance and every rate and threshold is kept up to date for 2026. Adjust the inputs above to match your situation, or browse all our calculators to plan your next step.