Which premiums include duty and lodging obligations for insurers.
Key information
Insurance duty applies to general insurance premiums in Victoria. When you buy a policy, your insurer pays the duty. This cost is usually included in your premium.
If you take out insurance with an unregistered insurer, such as an international insurance contract, you are responsible for paying the duty.
Duty applies to premiums for:
- property and contents in Victoria
- motor vehicles
- business risks and contingencies
- aviation insurance for aircraft that land and take off in Victoria
- trauma and disability insurance
- reverse annuity insurance (loans repaid by a deceased estate).
For aviation insurance, if your insurer is registered in Australia, they pay the duty when you pay or renew a premium. If your aviation insurer is not registered in Australia, you must lodge and pay duty with us.
Rates and calculations
Insurance duty is calculated as a percentage of the premium, including GST and commissions.
- Non-business insurance is charged at 10%.
- Duty on certain business insurance premiums is reducing by 1% each year from 1 July 2024 until it is abolished on 1 July 2033.
Example calculation
On a $500 non-business premium, the calculation is as follows:
- Premium and commission (excluding GST) = $525
- GST $52.50
- Gross premium = $577.50
- Duty 10% = $57.75
- Total = $635.25
For full details, see:
Exemptions
Exemptions are set out in legislation and public rulings. Insurers classify policies based on these rules, so you don’t need to apply for an exemption.
Insurance duty does not apply to certain types of insurance, including:
- hospital or medical benefits
- WorkCover
- goods and merchandise, or their freight via land, sea and air
- the physical hulls of a floating vessel used primarily for commercial purposes
- crops being grown, harvested or stored
- livestock
- agricultural machinery
- life insurance policies.
Duty may may still apply to riders (additional insurance) attached to life insurance policies. In these cases, duty is calculated on the cost of the rider. If this amount does not correctly reflect the rider’s value, we may set a new premium for duty purposes. For information on grandfathering rules for life insurance policies obtained before 2014, see issues arising from the coronavirus pandemic for life insurers.
From 1 January 2025, the exemption for friendly societies has been amended. It now applies only to societies that have a mutual structure and beneficial objects.
Register, lodge and pay
Insurers must register with us before lodging returns and paying insurance duty. Registered insurers lodge monthly returns and pay duty on premiums they collect.
Both the return and payment are due by the 21st of each month for the previous month’s premiums. You must lodge a return even if there is no duty payable for the month.
If you take out insurance with an unregistered insurer, such as an international insurance contract, you must lodge and pay duty yourself.
Lodge a monthly return and pay duty
