How the Wine Equalisation Tax Works in Australia
How it works
The Wine Equalisation Tax (WET) is a 29% tax on the wholesale value of wine sold or imported in Australia. It applies to grape wine, cider, perry, mead, sake, and fruit wines — but not to beer or spirits (which are covered by separate excise duties). WET is calculated on the last wholesale sale before the wine reaches a consumer, and it's applied before GST — meaning GST is then charged on the WET-inclusive price.
The wholesale value depends on how the wine is sold. For wholesale transactions (producer → retailer), the wholesale value is simply the sale price (ex-GST). For cellar door sales (producer selling directly to consumers), the ATO applies a formula: the wholesale value is generally 50% of the retail price (ex-GST). This reflects the fact that there's no wholesale transaction to set the base price — the producer is both wholesaler and retailer. Some producers use a different basis under the "notional wholesale selling price" rules if they can demonstrate their wholesale prices differ from the 50% default.
Eligible Australian wine producers can claim the WET producer rebate — a refund of up to $350,000 per financial year on WET payable. This rebate was introduced to support smaller wine producers and regional economies. The rebate applies per corporate group (associated entities share the $350,000 cap). To be eligible, you must be a producer of rebatable wine — blending, bottling, or manufacturing wine from raw materials in Australia.
When to use this calculator
- You're a wine producer calculating the WET on wholesale sales and want to see the total price breakdown including GST
- You sell wine at cellar door and need to work out the deemed wholesale value and corresponding WET
- You're checking how much of the $350,000 WET producer rebate you've used this financial year
- You're importing wine into Australia and need to estimate the WET and GST payable at the border
- You're a retailer or wholesaler and want to understand the tax components built into your cost price from the producer
Key concepts
- 29% WET rate
- WET is 29% of the wholesale value of wine (ex-GST, ex-WET). This rate has been unchanged since WET was introduced alongside the GST on 1 July 2000. On a wholesale price of $10.00 per bottle, WET is $2.90. GST is then calculated on the combined $12.90 (WET-inclusive), adding $1.29. Total price: $14.19.
- Cellar door / direct sales
- When a wine producer sells directly to consumers (cellar door, online, wine club), there's no wholesale transaction to base the WET on. The ATO's default rule deems the wholesale value to be 50% of the retail selling price (ex-GST). So if you sell a bottle for $30 retail (ex-GST), the deemed wholesale value is $15, and WET is 29% × $15 = $4.35.
- WET producer rebate ($350K cap)
- Eligible wine producers can claim back up to $350,000 in WET per financial year. The rebate is claimed on your BAS. Associated entities (companies under common ownership) share a single $350,000 cap. If your total WET for the year is less than $350,000, you effectively pay no WET at all. This benefits small-to-medium producers — large producers exceed the cap and absorb WET as a cost.
- Taxing point
- The WET taxing point is the last wholesale sale before the wine reaches a consumer. For a producer selling to a distributor who sells to a retailer, the taxing point is the distributor-to-retailer sale. For a producer selling directly to a retailer, the taxing point is that sale. For cellar door sales, the taxing point is the producer-to-consumer sale, with the deemed wholesale value rules applied.
Worked example — Small winery selling wholesale and cellar door
Bankside Wines produces shiraz and sells through two channels. Here's a per-bottle comparison:
Channel 1 — Wholesale to a retailer at $12.00 per bottle (ex-GST):
| Component | Calculation | Per bottle |
|---|---|---|
| Wholesale price (ex-GST) | — | $12.00 |
| WET (29%) | $12.00 × 0.29 | $3.48 |
| WET-inclusive price | $12.00 + $3.48 | $15.48 |
| GST (10%) | $15.48 × 0.10 | $1.55 |
| Retail shelf price (inc. all taxes) | $17.03 |
Channel 2 — Cellar door at $28.00 per bottle (inc-GST):
| Component | Calculation | Per bottle |
|---|---|---|
| Retail price (ex-GST) | $28.00 ÷ 1.1 | $25.45 |
| Deemed wholesale value (50%) | $25.45 × 0.50 | $12.73 |
| WET (29%) | $12.73 × 0.29 | $3.69 |
| GST (already in the $28.00) | $28.00 ÷ 11 | $2.55 |
| WET payable per bottle | $3.69 |
Annual WET and rebate (5,000 cases × 12 bottles = 60,000 bottles):
| Channel | Bottles | WET per bottle | Total WET |
|---|---|---|---|
| Wholesale | 40,000 | $3.48 | $139,200 |
| Cellar door | 20,000 | $3.69 | $73,800 |
| Total WET before rebate | $213,000 | ||
| WET producer rebate (capped at $350K) | −$213,000 | ||
| Net WET payable | $0 |
Bankside's total WET ($213,000) is well under the $350,000 rebate cap, so they pay zero net WET for the year. A larger producer making $500,000+ in WET would only offset $350,000, paying the remainder.