Costs, Price Factors and 2026 Rules
GST and stamp duty on business insurance premiums by state (2026)
How 10% GST and state insurance duty are added to Australian business insurance, rates by state, worked sums, input tax credits and the NSW emergency services levy.
Australian business insurance premiums carry two taxes: GST of 10% on the premium, and stamp duty (insurance duty) charged by the state or territory where the risk is located. Duty is generally calculated on the premium including GST, so the two compound. Based on the general insurance duty rates published by state revenue offices, the duty is 9% in NSW and Queensland, 10% in Western Australia, Tasmania and the Northern Territory, and 11% in South Australia; the ACT has abolished insurance duty. Victoria is phasing out duty on business insurance such as public and products liability and professional indemnity: 7% for policies effected or renewed from 1 July 2026 to 30 June 2027, falling by 1 point a year to nil from 1 July 2033 (non-business policies stay at 10%). In NSW, a small business with aggregated turnover under $2 million is exempt from duty on public and product liability, occupational (professional) indemnity and commercial vehicle insurance. A GST-registered business can usually claim the GST back as an input tax credit, but not the duty.
Rates can change in a state budget, and different classes of insurance can be taxed differently, so confirm the current rate with your state revenue office before relying on it. This guide is part of the public liability cost overview. Premiums are illustrative. Taxes are calculated on the base premium, so the rating factors behind that premium drive the tax too; packs with property sections are covered in business pack versus standalone liability.
How the taxes are calculated
For a liability policy with a base premium B:
- GST = 10% x B
- Duty = duty rate x (B + GST)
- Total = B + GST + duty = B x 1.1 x (1 + duty rate)
If a broker or policy fee is charged separately, GST applies to the fee as well. Whether a separately charged fee is also dutiable depends on the state's rules and how it is charged, so read the tax invoice: it normally shows each amount on its own line.
Rates and totals by state
The table uses an illustrative $2,000 base premium for a liability-only policy.
| State or territory | General insurance duty rate | GST | Duty | Total | Tax share of total |
|---|---|---|---|---|---|
| New South Wales (business not eligible for the small business exemption) | 9% | $200 | $198.00 | $2,398.00 | 16.597% |
| Victoria (business insurance, 2026–27) | 7% | $200 | $154.00 | $2,354.00 | 15.038% |
| Queensland | 9% | $200 | $198.00 | $2,398.00 | 16.597% |
| South Australia | 11% | $200 | $242.00 | $2,442.00 | 18.100% |
| Western Australia | 10% | $200 | $220.00 | $2,420.00 | 17.355% |
| Tasmania | 10% | $200 | $220.00 | $2,420.00 | 17.355% |
| Northern Territory | 10% | $200 | $220.00 | $2,420.00 | 17.355% |
| Australian Capital Territory | Nil | $200 | $0 | $2,200.00 | 9.091% |
The last column is what you enter in the GST and stamp duty split calculator to work backwards from a total premium to the base premium.
The NSW emergency services levy
In New South Wales, insurers contribute to the cost of fire and emergency services and recover it through an emergency services levy (ESL) added to property-type premiums, such as the building, contents and stock sections of a business pack. GST is charged on the premium plus ESL, and duty is charged on the lot. A liability-only policy generally does not carry the levy, but a business pack that includes property sections usually does.
Illustrative NSW business pack property section:
- Base premium: $1,000
- ESL (illustrative 18% of base; the actual percentage varies by insurer and class): $180
- GST: 10% x ($1,000 + $180) = $118
- Duty: 9% x ($1,000 + $180 + $118) = 9% x $1,298 = $116.82
- Total: $1,414.82
The NSW Government has committed to replacing the insurance-based levy with a property-based levy, and a parliamentary committee is due to report on the options by November 2026, but no start date had been set; check Revenue NSW for the arrangement that applies to your policy. Victoria moved its fire services funding off insurance premiums to a property-based levy in 2013, so Victorian premiums do not carry an insurance-based fire levy.
Input tax credits and income tax
If your business is registered for GST and buys the insurance for business purposes, you can usually claim the GST on the premium as an input tax credit on your business activity statement. Stamp duty is not GST and cannot be claimed as a credit.
Worked example (NSW business with turnover of $2 million or more, illustrative): total paid $2,398. GST of $200 is claimed back on the BAS, so the net cost is $2,198, made up of the $2,000 premium and $198 duty. That $2,198 is generally deductible as a business expense for income tax.
For a business not registered for GST, the full $2,398 is the cost, and the full amount is generally deductible.
Two related points:
- Tell your insurer your input tax credit entitlement. When you claim on a policy, insurers usually reduce the payment by any GST you can claim back on the replacement or repair. Most policy wordings require you to tell them your entitlement percentage; if you do not, you can end up with a tax adjustment. This matters more for property cover than liability.
- Prepaid premiums. Small business entities can generally deduct a prepaid premium immediately if the period covered is 12 months or less and ends before the end of the next income year. Check the ATO rules for your situation.
Policies covering more than one state
Duty is generally payable to the state where the risk is located. For a liability policy covering a business that operates across several states, insurers apportion the premium between states and charge each state's rate on its share. Illustrative example: a $3,000 base premium split 60% Victoria and 40% NSW, renewed in October 2026 by a business with turnover above $2 million.
- Victoria: $1,800 + GST $180 = $1,980; business insurance duty 7% = $138.60
- NSW: $1,200 + GST $120 = $1,320; duty 9% = $118.80
- Total: $3,000 + $300 GST + $257.40 duty = $3,557.40
Other amounts on the invoice
| Item | GST? | Duty? | Notes |
|---|---|---|---|
| Base premium | Yes | Yes (except ACT and exempt NSW small business cover) | The core price |
| NSW emergency services levy | Yes | Yes | Property-type cover in NSW |
| Broker fee | Yes | Depends on the state and how it is charged | Shown separately on the invoice |
| Insurer's policy fee | Yes | Usually treated as part of the premium | Check the invoice |
| Premium funding interest | Generally no (a financial supply) | No | Charged by the funder, not the insurer |
Frequently asked questions
Why is my premium taxed twice?
Duty is a state tax and GST is a federal tax. State duty laws generally use the GST-inclusive premium as the base, which is why the two compound.
Do I pay duty on workers compensation premiums?
Workers compensation is handled under each state's scheme rules and is generally treated differently from public liability. Check your premium notice and the scheme regulator's website.
Can a broker reduce the tax?
No. A broker can find a lower base premium, but GST and duty follow from that base and the location of the risk.
Does the ACT really have no insurance duty?
The ACT abolished duty on general insurance as part of its tax reforms, so ACT premiums generally carry GST only. Confirm with the ACT Revenue Office.
Sources
- Australian Taxation Office — GST on insurance, input tax credits, deductions and prepayments
- Revenue NSW — insurance duty and emergency services levy arrangements
- State Revenue Office Victoria — insurance duty in Victoria, including the phase-out on business insurance
- Queensland Revenue Office — insurance duty in Queensland
- RevenueSA — insurance duty in South Australia
- State Revenue Office Tasmania — insurance duty in Tasmania
- ACT Revenue Office — ACT tax arrangements
