How much of my donation is tax deductible?

If you donate to a registered Deductible Gift Recipient (DGR) charity, like The Fred Hollows Foundation, 100% of your eligible donation is tax deductible.

That means the full amount of your donation reduces your taxable income, rather than just a portion. Of course, what you actually “get back” from the Australian Taxation Office (ATO) depends on your income tax bracket.

To find out more about how much of a donation is tax deductible and what that can mean for your tax return, keep reading.

How does a tax deduction on a donation actually work?

A tax deduction is not a direct refund.

A tax-deductible donation reduces your taxable income by the full amount of your gift. In other words, it lowers the amount of tax you pay. And it does this by lowering the income used by the ATO to calculate the tax you owe and need to pay.

One way to conceptualise how a tax deduction actually works is like this: When you donate, the ATO treats the amount you donated as if you never earned it. For example, if you earned $70,000 and donated $200, your taxable income becomes $69,800 instead of the full $70,000.

That reduced taxable income is then taxed at the marginal rate of your income level. It is this rate of taxation which determines how much money you ultimately save.

Remember: Always seek the advice of a registered tax professional for guidance specific to your situation.

Is a tax deduction the same as a tax refund?

No, a tax deduction and a tax refund are not the same thing.

A tax deduction reduces the amount of income considered taxable by the ATO. A tax refund refers to money that is paid back to you as a result of overpaying your income tax.

An example of this occurring would be if your employer withholds more tax from your pay than you actually owe. In this case, you will receive the additional tax paid but not owed back after filing your annual tax return.

A tax deductible donation can increase the amount of money you are refunded by the ATO, but it doesn’t always do so and does not automatically create a refund.

A tax offset, sometimes referred to as a rebate, directly reduces the amount of tax you owe but it is applied after your overall tax owed is calculated. A tax deduction lowers your taxable income before it is calculated, whilst an offset is applied afterwards.

How much tax do I get back when I donate to charity?

When you make a tax deductible donation to charity you will get back an amount equal to your donation multiplied by your marginal tax rate.

You do not get refunded the full donation amount.

What this means is that the higher your tax bracket, the larger your effective tax saving.

Charity Donation Tax Deduction Example 1

Let’s use this clear example:

In this scenario, your marginal tax rate is 30%.

If you donate $200 to The Fred Hollows Foundation, your tax saving is calculated like this:

Donation amount x marginal tax rate = Tax saving

$200 x 30% = $60.

In this example, when you donate $200, your “out-of-pocket” cost after tax is applied is effectively $140.

Charity Donation Tax Deduction Example 2

Let’s look at a different example:

In this scenario, your marginal tax rate is 16% - meaning you earn a lower salary and are therefore taxed at a lower rate.

If you donate $200 to The Fred Hollows Foundation, your tax saving is calculated like this:

$200 x 16% = $32.

Therefore, the actual benefit of a tax deductible donation depends on your income bracket and not the charity or donation size. The higher your marginal tax rate, the higher your tax saving.

Does donating $100 to charity save me $100 in tax?

No, donating $100 to charity, even if it is tax deductible, does not save your $100 in tax.

What it does do is reduce your taxable income by $100. Your tax saving is then based on your marginal rate.

Why does my income tax bracket affect how much I save?

The Australian taxation system is marginal in structure. This means that different portions of your income are taxed at different rates. The first portion of your income, up until the tax threshold, is not taxed.

The next portion is taxed at a 16% rate, then 30%, then 37% and finally 45% (as of the writing of this article). If we look at an example of a $100 tax deductible donation to a charity, the amount of tax saved will depend on the marginal rate of tax.

• 0% tax rate means $0 tax saving on a $100 donation
• 16% tax rate means $16 tax saving on a $100 donation
• 30% tax rate means $30 tax saving on a $100 donation
• 37% tax rate means $37 tax saving on a $100 donation
• 45% tax rate means $45 tax saving on a $100 donation

The real cost saving is the amount of tax saved subtracted from the $100 donation. This is why two people can donate the same amount but receive different tax benefits.

Are there limits on how much I can claim for charitable donations in Australia?

No, there is no fixed cap on how much you can claim for eligible charitable donations.

As long as you have the records, such as receipts, and as long as the organisation donated qualifies as a Deductible Gift Recipient (DGR), you can claim tax deductions for as much as you donate.

If you’re unsure about eligibility, you can read more about whether your donation qualifies as a deductible gift, check out our article on whether your donation is tax deductible.

If you would like to understand how tax deductions work when donations are automatically made from your salary, read our explanation of how payroll giving is treated differently at tax time.

Remember to seek the advice of a registered tax professional for guidance specific to your situation.

Can I claim my donation if I've lost my receipt?

Yes, you can submit a claim when filing your tax return. However, without a receipt or proof of donation, the ATO may not allow the claim.

That is why it is recommended that you seek a replacement receipt from the charity.

Here at The Fred Hollows Foundation, we automatically issue receipts for donations, and our team can re-send it if needed.

How do I claim a charitable donation on my Australian tax return?

Claiming your donation as tax deductible is fairly straightforward:

1. Keep your donation receipt, digital or on paper, in a safe, easily accessed place.
2. Lodge your tax return via the online government portal or through your tax accountant.
3. If lodging yourself, enter your donation amount in the “Deductions” section. If you are using an accountant, make sure to let them know how much you donated, to whom and when, and send them your receipts.
4. The ATO will then calculate your reduced taxable income automatically.

All donations made before 30 June 2026 can be included in this financial year’s return.

What donations are not tax deductible in Australia?

It is important to realise that not all payments to charities are considered tax deductible. In essence, only an actual gift can be used to reduce taxable income.

Common non-deductible examples include:

• Raffle or lottery tickets
• Event tickets or fundraising dinners
• Merchandise purchases
• Donations to non-DGR organisations
• Most contributions to crowdfunding campaigns

Political donations are subject to different rules and we recommend you seek advice from a tax accountant for your specific needs.

Click here for a full breakdown of whether your donation qualifies as a deductible gift.

Frequently Asked Questions

Is there a charity donation tax deduction calculator?

Unfortunately, there is no official ATO calculator specifically for donations. However, the formula outlined above is straightforward:

Your donation amount x your marginal tax rate = your tax saving

For example: A $100 donation at 30% means a $30 tax saving. (100 x 0.3 = 30)

If you want to model your overall tax return, you can also use the ATO’s general income tax estimator.

Are monthly donations tax deductible?

Yes, they are.

Recurring monthly donations to a DGR charity are tax deductible in the same way as one-off gifts. As long as you keep your receipts or receive an annual donation summary, you can claim the total amount donated across the financial year.

Can I claim a donation I made on behalf of someone else?

You can only claim a donation if you made the payment yourself and have the receipt in your name.

In a situation where you donate on behalf of someone else or in honour of someone else but use your own funds and receive the receipt, you can still claim it.

Donate to The Fred Hollows Foundation

You can make a tax-deductible donation to The Fred Hollows Foundation, one of Australia's most trusted charities, before 30 June 2026 as either a once-off gift or as part of a monthly donation.