Lottery tax rates by country
Tax treatment of lottery winnings varies dramatically depending on where you live. Here's a plain-language overview of what winners can expect in each major English-speaking market.
United States
The IRS treats lottery winnings as ordinary income. Federal withholding is 24% at the time of payment, but your actual liability may be higher — the top federal bracket is 37% for income over $578,125 (2024). Most large winners end up owing additional taxes when filing. State taxes range from 0% (Florida, Texas, California has no lottery tax) to over 10% in some states.
The cash value lump sum is typically around 60% of the advertised jackpot — the advertised amount assumes annual annuity payments over 29 years.
Canada
Canadian lottery winnings are completely tax-free at the federal and provincial level. The Canada Revenue Agency does not consider lottery prizes to be taxable income. However, any interest earned on your winnings after you receive them is taxable.
United Kingdom
UK lottery winnings are also tax-free. You won't pay income tax or capital gains tax on a prize. However, your estate could be liable for inheritance tax if you pass the money on — and interest, dividends, or rental income from invested winnings is taxable as normal.
Australia
Australian lottery winnings are not taxed as income. The Australian Taxation Office does not treat lottery prizes as assessable income. As with Canada and the UK, investment returns on your winnings are subject to normal tax rules.
This calculator provides estimates for general information only. Tax law is complex and changes regularly. Always consult a qualified tax professional before making financial decisions about a lottery prize.