Insurance duty — sometimes called stamp duty on insurance — is a state and territory tax applied to insurance premiums in Australia. It is embedded in the premium you pay for home, car, business, and other general insurance policies, which is why many Australians are unaware it exists. The rate varies by state and by insurance type, but is typically around 9–10% of the base premium.
What Is Insurance Duty?
Insurance duty is a percentage levy applied by state governments to the premium charged by an insurer. It is calculated on the base premium before the 10% GST is applied. The duty is then included in the total premium you see on your insurance certificate of currency or renewal notice.
A typical home insurance bill might look like:
| Component | Amount |
|---|---|
| Base premium | $1,000 |
| Insurance duty (9%) | $90 |
| GST on premium + duty | $109 |
| Total you pay | $1,199 |
Note: GST is applied to the base premium plus the insurance duty amount in most cases.
Insurance Duty Rates by State (2025)
| State | General insurance rate | Life insurance rate | Notes |
|---|---|---|---|
| NSW | 9% | 5% | Applied to the “insured amount” concept |
| VIC | 10% | 5% | |
| QLD | 7.5–9% | 5% | Varies by insurance type |
| WA | 10% | 10% | |
| SA | 11% | 1.5% | Higher rate than most states |
| TAS | 8% | 5% | |
| ACT | 10% | 5% | |
| NT | 10% | 5% |
Rates are indicative. Some states apply different rates to motor vehicles, workers’ compensation, and public liability. Verify with the relevant state revenue authority.
Which Insurance Types Are Affected?
Insurance duty applies to most general insurance policies:
Typically subject to insurance duty:
- Home and contents insurance
- Car and motor vehicle insurance
- Business/commercial property insurance
- Public liability insurance
- Professional indemnity insurance
- Travel insurance (some states)
- Landlord insurance
- Marine hull insurance
Typically exempt from insurance duty:
- Life insurance (taxed separately at lower rates, or exempt in some states)
- Private health insurance (exempt from insurance duty in all states; already regulated under federal law)
- Workers’ compensation insurance (exempt in most states — regulated separately)
- Reinsurance policies
- Some compulsory third-party (CTP) motor insurance
How Insurance Duty Appears on Your Premium
Insurers are required to collect insurance duty on behalf of state governments and remit it to the relevant revenue authority. In most cases, the amount is built into the quoted premium and may or may not be itemised separately — practices differ by insurer. If your insurer itemises it, you will see a line for “stamp duty” or “insurance duty” on your premium schedule.
South Australia — Higher Rate
SA applies an 11% rate on most general insurance classes, which is the highest in Australia. This means South Australian property and business owners pay more in insurance duty relative to other states for equivalent coverage. The SA rate has been a subject of ongoing policy debate, as high insurance duty is argued to suppress insurance uptake, particularly in regional areas.
Northern Territory — Remote Area Considerations
Insurance premiums in remote and regional NT are already elevated due to higher claims risk and limited insurer competition. The 10% insurance duty adds further to the cost of insuring remote property.
Insurance Duty and Business Deductions
For businesses, insurance duty paid on business-related insurance policies (public liability, professional indemnity, business property) is deductible as a business expense, in the same way the base premium is deductible. The duty forms part of the cost of the policy, so the full premium inclusive of duty (excluding GST if you are GST-registered) is deductible.
Comparison with Stamp Duty on Property
Insurance duty is often overlooked because it is built into the premium and never requires a separate transaction — unlike stamp duty on property purchases, which is a large upfront payment. Over time, however, insurance duty adds up. For a business paying $20,000 in annual insurance premiums, a 10% insurance duty adds $2,000 per year in additional state tax.
Related Articles
- State and Territory Taxes — Overview
- Payroll Tax Australia — Complete Guide
- Motor Vehicle Stamp Duty Australia
- State and Territory Tax hub
- Taxes hub
Frequently Asked Questions
Is insurance duty the same as stamp duty? Insurance duty is a type of stamp duty — it is a state duty applied to insurance contracts, rather than property transfer contracts. Some states still refer to it as “stamp duty on insurance.” The mechanism and administration are similar, but the rate and calculation method differ from property stamp duty.
Can I get a refund on insurance duty if I cancel my policy? If you cancel a policy mid-term and receive a refund of unused premium, the insurer is typically required to refund the insurance duty component proportionate to the refunded premium amount. The insurer then reclaims this from the state revenue authority.
Does private health insurance attract insurance duty? No. Private health insurance is regulated at the federal level under the Private Health Insurance Act 2007 and is exempt from state insurance duty in all Australian states and territories.
This article provides general tax information. Insurance duty rates and exemptions vary by state and insurance type. For advice tailored to your situation, speak with a registered tax agent or insurance professional. Find a tax agent through the Tax Practitioners Board register.