Crypto staking rewards are generally taxable as ordinary income when you receive them, and then again as a capital gain or loss when you sell them. The first tax hits the market value of the reward at the moment you gain control of it; that same value becomes the reward’s cost basis, so the second tax only applies to the change in value between receipt and sale. This two-step treatment is broadly consistent across the US, UK, Canada and Australia in 2026, though the details differ. Estimate the reward side with our staking calculator. This article is general information, not tax advice.
Step 1: income when you receive rewards
When a staking reward lands in a wallet you control, most tax authorities treat its market value at that moment as ordinary income, taxed at your normal income rate. If you stake 100 ETH and earn 5 ETH in rewards over the year, the value of those 5 ETH at the time each was received is added to your income.
This is the part people most often miss. You owe income tax on rewards even if you never sell them — receiving them is the taxable event.
Step 2: capital gains when you sell
Each reward also gets a cost basis equal to its value at receipt. When you later sell or swap that reward, you have a capital gain or loss equal to the sale price minus that cost basis. Hold it long enough and it may qualify for long-term or discounted treatment — for example, the US long-term rate or Australia’s 50% CGT discount after 12 months.
Example
| Event | Value | Tax treatment |
|---|---|---|
| Receive 1 reward coin | $100 | $100 ordinary income; cost basis = $100 |
| Coin rises, you sell later | $150 | $50 capital gain (proceeds − basis) |
You are taxed on $100 of income and $50 of gain — a total of $150, not $250. The original $100 is not taxed twice.
How each country handles staking
- United States (IRS): rewards are income at fair market value on receipt (Revenue Ruling 2023-14), then capital gains on sale. The 12-month holding period for long-term rates starts at receipt.
- United Kingdom (HMRC): rewards are usually miscellaneous income at receipt; later disposal is a capital gain against the £3,000 allowance. The pooling rules apply to the reward coins.
- Australia (ATO): staking rewards are ordinary income at receipt; the 50% CGT discount can apply to the later gain if held over 12 months.
- Canada (CRA): treatment can depend on whether you’re seen as carrying on a business; for most individuals rewards are income at receipt and 50% of any later gain is included.
Because rules and individual circumstances vary, treat these as starting points and confirm with the relevant authority. See how crypto capital gains tax works for the capital-gains side.
Calculating your staking rewards
To estimate how many coins you’ll earn, apply the advertised APY over your staking period. With compounding (rewards restaked), the ending balance is amount × (1 + APY)^years; with simple payout it is amount × (1 + APY × years). Our staking calculator does both and can value the reward at a price you enter. Remember:
- APY already includes compounding — don’t double-count it.
- Validator commission reduces your real yield.
- Lock-ups and slashing are risks that the headline APY ignores.
Liquid staking and DeFi wrinkles
Plain staking is relatively simple; liquid staking and DeFi add complications. When you stake through a protocol that issues a liquid staking token (for example, a token representing staked ETH), there can be two questions: is depositing into the protocol itself a taxable swap, and how are the accruing rewards taxed? Tax authorities have not always given crystal-clear guidance, and treatment can hinge on whether the wrapper token is considered a disposal of your original coin. Conservative practice is to treat a swap into a distinct liquid-staking token as a disposal and to value rewards as income when they accrue to you. Because the rules here are genuinely unsettled in places, this is exactly the kind of situation where professional advice pays for itself — and where these estimates should be treated as a starting point only.
Does it matter if rewards are “locked”?
A common question is whether you owe tax on rewards you can’t yet withdraw. The general principle in most jurisdictions is that income arises when you have dominion and control over the reward — roughly, when you could deal with it. Rewards that are credited but locked by a network unbonding period sit in a grey area; many advisers use the point of receipt/credit as the income date. Keep a note of both the accrual date and any unlock date so your adviser can apply the correct test for your country.
Record-keeping for stakers
Staking creates a stream of small income events, each needing a date and a value. To stay compliant:
- Record the date and market value of every reward as you receive it.
- Treat that value as income for the year.
- Carry it forward as the cost basis for that reward.
- When you sell, calculate the gain with the profit calculator and apply your country’s rules with the tax estimator.
Frequent rewards (common on networks like Solana) can mean hundreds of entries a year — see the Solana guide and Ethereum guide for coin-specific notes. Good logging now saves a painful reconstruction at tax time.
Staking can be rewarding, but its tax treatment is more involved than simple buy-and-hold. The two-step income-then-gains model is the key thing to remember. For anything substantial, get professional advice; the figures here and in our calculators are estimates, not advice.