Guide to Lottery Taxes | theLotter
 
 
 

All About Lottery Taxes

Will You Pay Tax When You Win the Lottery?

Winning the lottery can make your dreams come true overnight and jackpot prizes often reach astronomical proportions. Before you receive your prize money, however, government tax collectors may claim their share of the prize. In some lotteries (such as the US Powerball and Mega Millions), the advertised jackpots are the prize amounts before the deduction of taxes, while in other lotteries, no taxes are deducted at all. Even so, you may be subject to local taxation, based on your country of residence. Always check with a tax professional if you come into a large sum of money.

Tax-Free Lottery Prizes Around the Globe

The lotteries listed below are considered "tax free" as their published prizes are exactly what you will receive when you win the jackpot. In some cases, certain taxes have already been deducted at source. If you have any questions about a specific lottery, please consult its tax requirements.

Australia Monday Lotto
Australia Oz Lotto
Australia Powerball
Australia Saturday Lotto
Australia Wednesday Lotto
Austria Lotto
Austria EuroMillions
Brazil Dia de Sorte
Brazil Dupla-Sena
Brazil Lotofácil
Brazil Mega-Sena
Brazil Quina
Canada Lotto 6/49
EuroJackpot** (tickets purchased in Spain)
France Loto
Germany Lotto
Hungary Hatoslotto
Hungary Otoslotto
Ireland Lotto
Italy MillionDAY
Japan Loto 6
Japan Loto 7
New Zealand Powerball
Ontario 49
South Africa Lotto
South Africa Powerball
Spain EuroMillions**
France EuroMillions

** Citizens of most countries other than Spain are entitled to a full tax refund in order to prevent double taxation.

Lottery Taxes Explained

Lottery taxes, like all taxes, are decided by the local/federal government where the ticket is physically purchased. Let's take a closer look at the different types of taxes a player will encounter.

Taxes at source are deducted by the Lottery Organisation prior to the prize being paid out to the winner. For example, if a player wins a $5 million Mega Millions jackpot, then Mega Millions and the US government will take out 30% of that before the player is given the money. Thus the total prize you receive from theLotter will be the prize post-tax.

Taxes that you may be subject to in your country of residence like income tax are the responsibility of the individual players, not theLotter. We recommend you consult with a financial advisor and accountant should you win a huge sum of money like a jackpot.

Taxes not deducted at the source are referred to as "further local taxation." These taxes differ based on the player's country of residence and includes income tax and others. Local taxation is the responsibility of the individual player. In the event of a huge win, we advise winners to contact a financial advisor and accountant who can address local taxation issues.

US Lotteries: Taxes 101

US lotteries are a bit more complicated than some other nations' games when it comes to taxes because their taxes differ depending on the state where the ticket is purchased. The payout of prizes is based on tax laws in each individual state. Below is a list of relevant US multi-state and state lotteries and their individual tax information. Currently a player cannot choose from which state their tickets are purchased for multi-state games. Information is presented for non-US residents only.

US Powerball - Tickets for this lottery are purchased in Oregon. Lottery prizes are subject to taxation at source. There are three tax bands. Tax Band 1: Tax-free up to $599.99. Tax Band 2: Any prize between $600 and $1,499.99 is subject to a tax rate of 30% for non-residents. Tax Band 3: Any prize above $1,500 is subject to a tax rate of 38% for non-residents.

US Mega Millions - Tickets for this lottery are purchased in Oregon. Lottery prizes are subject to taxation at source. There are three tax bands. Tax Band 1: Tax-free up to $599.99. Tax Band 2: Any prize between $600 and $1,499.99 is subject to a tax rate of 30% for non-residents. Tax Band 3: Any prize above $1,500 is subject to a tax rate of 38% for non-residents.

New York Lotto - There are three tax bands. Tax Band 1: Tax-free up to $599.99. Tax Band 2: Any prize between $600 and $4,999.99 is subject to a tax rate of 30% for non-residents. Tax Band 3: Any prize above $5,000 is subject to a tax rate of 38.82% for non-residents.

New York Take 5 - There are three tax bands. Tax Band 1: Tax-free up to $599.99. Tax Band 2: Any prize between $600 and $4,999.99 is subject to a tax rate of 30% for non-residents. Tax Band 3: Any prize above $5,000 is subject to a tax rate of 38.82% for non-residents.

New York Cash4Life - There are three tax bands. Tax Band 1: Tax-free up to $599.99. Tax Band 2: Any prize between $600 and $9,999.99 is subject to a tax rate of 30% for non-residents. Tax Band 3: Any prize above $5,000 is subject to a tax rate of 38.82% for non-residents.

California SuperLotto Plus - There are two tax bands. Tax Band 1: Tax-free up to $599.99. Tax Band 2: Any prize above $600 is subject to a tax rate of 30% for non-residents.

California Fantasy 5 - There are two tax bands. Tax Band 1: Tax-free up to $599.99. Tax Band 2: Any prize above $600 is subject to a tax rate of 30% for non-residents.

* Check the tax laws in your country of residence for any further local taxation you may be subject to.

Lottery Taxation around the World

All taxes listed below are deducted at the source.

Chile - There is one tax band of 17%.
Colombia - There are two tax bands. Tax Band 1: Tax-free up to Cop70,000. Tax Band 2: Any portion of the prize exceeding Cop70,000 is subject to a tax rate of 20%.
Italy - There are five tax bands. Tax Band 1: Tax-free up to €100. Tax Band 2: The portion of the prize between €100.01 and €300 is subject to a local retailer fee of €1.03. Tax Band 3: The portion of the prize between €300.01 and €500 is subject to a local retailer fee of €3.10. Tax Band 4: The portion of the prize between €500.01 and €1,000 is subject to a local retailer fee of €3.10 and a tax rate of 12%. Tax Band 5: Any portion of the prize exceeding €1,000.01 is subject to a local retailer fee of €6.20 and a tax rate of 12%.

Prizes won in the Italy Lotto lottery are subject to a tax rate of 8%.

Prizes for Italy MillionDAY are quoted and paid as net amounts, after the 8% tax has been deducted.

Latvia - There are three tax bands. Tax Band 1: Tax free on wins up to €3,000. Tax Band 2: The portion of the prize between €3,000 and €55,000 is subject to a tax rate of 23%. Tax Band 3: Any portion of the prize exceeding €55,000 is subject to a tax rate of 31.4%.
Mexico - There is one tax band of 7%.
Peru - There is one tax band of 10%.
Poland - There are two tax bands. Tax Band 1: Tax-free up to PLN2,280. Tax Band 2: Any portion of the prize exceeding PLN2,280 is subject to a tax rate of 10%.
Romania - There are three tax bands. Tax Band 1: Prizes up to RON66,750 are subject to a tax rate of 1%. Tax Band 2: The portion of the prize between RON66,750 and 445,000 is subject to a flat tax of RON667.50 and a tax rate of 16% on the amount over RON66,750. Tax Band 3: Any portion of the prize exceeding RON445,000 is subject to a flat tax of RON61,187.50 and a tax rate of 25% on the amount over RON445,000.
Spain - There are two tax bands. Tax Band 1: Tax-free up to €10,000. Tax Band 2: Any portion of the prize exceeding €10,000 is subject to a tax rate of 20%. Citizens of most countries other than Spain are entitled to a full tax refund in order to prevent double taxation. Claiming this refund is the sole responsibility of the player and must be done through the Spanish tax authorities. Tax refunds when approved will be issued during the following calendar year.
Switzerland - There are two tax bands. Tax Band 1: Tax-free up to CHF999.99. Tax Band 2: Any prize of CHF1,000 or higher is subject to a tax rate of 35%.
Ukraine - There is one tax band of 19.5%.

* Check the tax laws in your country of residence for any further local taxation you may be subject to.

How do I pay taxes on lottery prizes I won through theLotter?

For taxed lotteries, you'll often see the phrase "lottery prizes are subject to taxation at source" in our info pages. This means that the taxes deducted directly by the lottery organisation and the local and/or federal government where the lottery takes place. Prizes are paid out to the winners only after all taxes are deducted. theLotter then deposits the full post-tax prize amount in the winner's account. theLotter takes no commission on lottery prizes.

Often taxes deducted at the source are dependent on the amount of money won. The differing tiers are called Tax Bands. On each individual lottery info page, you'll see each tax band written out in the Tax Requirement section of the info table.