How Australian Traders Get Paid by Prop Firms: AUD, Fees and Tax Records

Passing the challenge is the hard part, but getting the money into an Australian bank account has its own costs. Prop firms charge and pay in US dollars, and every step between their account and yours can take a slice: your card when you pay the fee, the payout method, the exchange rate and, if you take stablecoins, the exchange you sell them on. This guide covers the routes the main firms offer Australians, what each one costs, and the records the ATO expects you to keep.

How the money moves

A typical payout goes: the firm approves your request, sends US dollars or a stablecoin by its chosen method, and you convert it to Australian dollars, either at your bank, through a payment platform, or by selling the stablecoin on an Australian exchange. Each of those steps has a fee or an exchange rate margin, and the total can differ by a few percent between routes.

Payout methods at the main firms

Topstep offers Wise transfers too, but only to traders in China, Canada and the UK, so Australians are paid by wire. The5ers also offers HUB Credits with no commission, but they can only be spent on new programmes. Payouts at every firm go only to an account in your own name.

Paying the challenge fee

Challenge prices are set in US dollars, so paying with an Australian card means the card scheme’s exchange rate plus, on many cards, an international transaction fee, often around 3% of the purchase. On a US$500 challenge that is about US$15 before the exchange rate margin. A card with no international transaction fees, or a multi currency account that holds US dollars, avoids most of it. Several firms also take crypto for fees, which avoids the card fee but means buying the crypto first.

Worked example: a US$2,000 payout

These figures are illustrative, using an exchange rate of 0.65 US dollars to the Australian dollar. Your bank’s fees and rates will differ, so look them up.

• International wire at a firm that charges US$30. US$1,970 arrives. Your bank may charge a fee to receive a foreign transfer, and its exchange rate will usually sit a percent or more below the mid market rate. At a 1% margin, US$1,970 becomes about A$3,000.
• Stablecoin with no firm fee. You receive about 2,000 USDC, less the network fee. Selling it on an Australian exchange for Australian dollars costs a trading fee and a spread, which vary by exchange and by how you trade. If they come to 0.6% all in, that is about A$3,058.
• Bank transfer at a firm that charges 3.5%. US$70 goes in commission before the money leaves the firm, so US$1,930 arrives and becomes about A$2,940 at a 1% bank margin.

The gap between the best and worst route here is over A$100 on one payout. Over a year of regular payouts it adds up, so pick the route before you need it and open the accounts early, because platform and exchange identity checks can take days.

-end

Stablecoin payouts and tax

A stablecoin payout is not tax free just because it never touched a bank. The ATO says that if you receive crypto as payment for services, you treat its Australian dollar market value when you receive it as assessable income. When you later sell or swap it, that can trigger capital gains tax on any change in value since you received it, and the value you declared as income is usually the starting cost base. With a dollar stablecoin the change is usually small, but the Australian dollar can move between the day you are paid and the day you sell, so record both.

Records to keep for the ATO

This is general information, not tax advice. Australian residents for tax purposes declare their worldwide income, so payouts from an overseas firm belong in your return. The income year runs from 1 July to 30 June. Keep a simple log from your first purchase:

Whether your trading counts as a business decides whether fees like challenge costs are deductible, so take the log to a registered tax agent. Our prop firm income and tax guide covers how payouts are usually treated in Australia, the US and the UK.

Common mistakes

• Using an account in someone else’s name. Payouts go only to the account holder, and a mismatch with your ID can hold up or void a payout.
• Leaving the payout setup until the first payout. Rise, Wise and exchange accounts all need identity checks.
• Converting at a bad moment out of habit. If you hold US dollars or stablecoins, you can choose when to convert, but record the rate either way.
• Forgetting the fee side of the ledger. Failed challenges and resets are part of the picture for your tax agent.

Checklist

• Check which payout methods your firm offers Australians, and each one’s fee and speed, before you buy.
• Pay fees with a card or account that has no international transaction fee.
• Open your payout platform or exchange account early and finish its identity checks.
• Log every fee and payout in both currencies from day one.
• See our guide for Australian traders for which firms accept you, and prop firm payout methods for how each route works.