Giving to charity should not create a tax problem, but donation claims are easy to get wrong. A gift to an organisation without DGR status, a raffle ticket or a dinner ticket claimed in full, or a round number with no receipt behind it can all be reversed if the ATO asks questions.
This guide covers the gift deduction rules for 2025-26 returns and the 2026-27 year: checking DGR status, the removal of the $2 minimum, receipts, what is not deductible, fundraising events, workplace giving, and what happens if the ATO reviews your claim. Every rule was checked against the ATO gifts and donations page and the 2026 tax return instructions on 7 October 2026.
It is for employees, sole traders and investors who donate during the year. If the ATO has already contacted you about your return, read our guide to an ATO review as well.
Key takeaways
- Only gifts to an organisation with DGR status at the time you give are deductible. Check it on ABN Lookup.
- The $2 minimum has been removed for gifts made from 1 July 2024.
- Bucket donations: up to $10 a year can be claimed without a receipt. Everything else needs a record.
- Raffle tickets, items with a price and gifts where you get a material benefit are not deductible.
- Event tickets: only partly deductible if you paid more than $150 and the benefit is no more than $150 and 20% of the payment.
- Penalties for false statements start at 25% of the shortfall for failing to take reasonable care.
Donation deductions at a glance
| Rule | Position for 2025-26 and 2026-27 |
|---|---|
| Who you give to | Must have DGR status when you give |
| Minimum amount | No $2 minimum for gifts from 1 July 2024 |
| No-receipt bucket donations | Up to $10 total for the income year |
| Fundraising events | Payment over $150; benefit no more than $150 and 20% of payment |
| Political parties and independents | $2 or more, up to $1,500 (separate rules) |
| Large gifts | Gifts of money, or property valued by the ATO above $5,000, can be spread over up to 5 years |
Source: ATO – gifts and donations, ATO – myTax 2026 gifts or donations, ATO – minor benefits, checked 7 October 2026.
What makes a donation tax deductible?
The ATO says a gift is deductible only if it:
- is made to an organisation with deductible gift recipient (DGR) status at the time of the gift
- is truly a gift: you give voluntarily and receive no material benefit or advantage in return
- is money or property, including financial assets such as shares
- complies with any gift conditions that apply to that DGR
Your time and skills as a volunteer are not money or property, so they cannot be claimed.
How do you check if a charity is a DGR?
Search the organisation’s name or ABN on ABN Lookup and look for “Deductible gift recipient status”, or use the DGR listing tool. Being a registered charity is not enough: many charities are not DGRs. Charities wanting to offer deductible giving can read our charity registration guide or our DGR application service.
Has the $2 minimum been removed?
Yes. The ATO confirms the $2 minimum for gifts to DGRs has been removed, backdated so it applies to eligible gifts made from 1 July 2024. For gifts made before 1 July 2024, only gifts of $2 or more were deductible. The change does not apply to political donations.
What records do you need?
- Receipts from the DGR, or a signed letter from it confirming the amount.
- Bucket donations: up to $10 in total for the year can be claimed without a receipt, per the 2026 D9 instructions. More than that needs a receipt.
- Workplace giving: your income statement, payment summary, or a letter or email from your employer.
Our guide to claiming without receipts and tax return checklist explain how long to keep records and how to organise them.
What donations are not deductible?
| Payment | Deductible? | Why |
|---|---|---|
| $100 to a DGR charity online, with receipt | Yes | Voluntary gift to a DGR, recorded |
| $50 to a friend’s crowdfunding page | No | Crowdfunding platforms are usually not DGRs |
| $40 of raffle tickets | No | You get a chance to win a prize |
| $30 charity chocolates or a keyring | No | Items with an advertised price are a purchase |
| $400 gala ticket with a $100 performance | No | $100 is more than 20% of $400 ($80) |
| $260 golf day with a $20 game | $240 | $260 less the $20 benefit |
The last two rows are the ATO’s own minor benefit examples. Gifts to family and friends are never deductible, whatever the reason.
How does workplace giving work?
Under a workplace giving program, your employer pays your nominated donations to the charity each payday and reduces the tax withheld from your pay. You still claim the total at the gifts or donations question in your return, using the amount on your income statement. Donations under a salary sacrifice arrangement are different: you cannot claim those as a deduction.
What happens if the ATO reviews your donation claims?
The ATO can ask you to show receipts and confirm each recipient’s DGR status. If a claim is disallowed, your assessment is amended, you pay the extra tax plus interest, and a penalty may apply. The ATO penalty page sets the base penalty at 25% of the shortfall for failing to take reasonable care, 50% for recklessness and 75% for intentional disregard. Telling the ATO about a mistake yourself generally reduces the penalty.
Individuals generally have two years to amend an assessment, and sole traders have four years from 2024-25. Fixing an error early through an amendment is cheaper than waiting for a letter. Our individual tax return service includes a review of deduction claims before lodgment, and if you also hold investments, see our rental property deductions guide.
Worked example: what Priya can actually claim for 2025-26
Priya earns $95,000. During 2025-26 she gave $300 online to a DGR (receipt held), dropped $8 into charity buckets, paid $250 for a charity golf day where the game was worth $40, bought $50 of raffle tickets and gave $100 to a friend’s crowdfunding page.
Golf day: 20% of $250 = $50. The $40 benefit is under both $50 and $150, so she can claim $250 – $40 = $210.
Deductible total: $300 + $8 + $210 = $518. The raffle tickets and crowdfunding gift are not deductible.
At her marginal rate of 30% plus the 2% Medicare levy (2025-26 rates), the deduction is worth about $518 x 32% = $165.76. Claiming the full $708 she spent would have overstated her deduction by $190.
Rule of thumb: If you cannot show a receipt and a DGR check for a donation, do not claim it. The only exception is up to $10 of bucket donations a year.
Common mistakes with donation deductions
- Assuming every charity is a DGR: check ABN Lookup each time, especially for overseas appeals and crowdfunding.
- Claiming the full price of tickets: raffles are never deductible and events only pass the minor benefit test in limited cases.
- Estimating instead of recording: a round figure repeated each year with no receipts is hard to defend.
- Double counting workplace giving: claim the total once, using the employer’s figure.
- Missing the spreading election: for large gifts to a DGR such as a private ancillary fund, the election to spread must be made before you lodge.
FAQ about donation deductions
Is there still a $2 minimum for tax-deductible donations?
No, not for recent gifts. The ATO says the $2 minimum for gifts to deductible gift recipients has been removed, backdated to gifts made from 1 July 2024. Donations made before that date still needed to be $2 or more. The change does not apply to political donations, which keep their own rules.
Can I claim donations without a receipt?
For bucket collections and similar small cash donations to a DGR, the ATO lets you claim up to $10 in total for the income year without a receipt. Anything above that needs a receipt or other written record. Workplace giving can be supported by your income statement or a letter or email from your employer.
Are raffle tickets or charity dinners tax deductible?
Raffle tickets are not deductible, because you receive a chance to win a prize. A fundraising dinner or event ticket is only partly deductible if you paid more than $150 and the benefit you received is worth no more than $150 and no more than 20% of what you paid. You then deduct the payment less the value of the benefit.
Do I claim workplace giving in my tax return?
Yes. Your employer pays the donations to the charity each payday and reduces the tax withheld, but you still claim the total at the gifts or donations question in your return. Your income statement, payment summary, or a letter or email from your employer shows the amount. Donations made through a salary sacrifice arrangement are not claimed.
How far back can the ATO amend my donation claim?
Individuals generally have two years from the day after the notice of assessment is issued, and sole traders have four years for 2024-25 and later years. The ATO can go further back in exceptional cases such as fraud or evasion. Keep receipts for at least five years from lodgment so you can support every claim.
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Talk to a registered tax agent
Nanak Accountants can review your donation receipts, check DGR status and lodge your return with every gift claimed correctly. If the ATO has queried a claim, we can respond for you. Call 1300 626 258 or visit Nanak Accountants. See our 2025-26 tax rates guide for your marginal rate.
This article is general information only and is not personal tax or legal advice. Figures and rules were checked against the ATO gifts and donations, 2026 tax return instructions, minor benefits, workplace giving, penalties and amendment pages on 7 October 2026. Rates and thresholds change, so confirm the current position before acting.
