How to Calculate LAL and Excise Duty on Spirits (With Worked Examples)

Excise duty on spirits is calculated on the alcohol content, not the volume of liquid. The key unit is LAL — litres of pure alcohol. Once you understand LAL, the whole calculation becomes simple. Let's work through it.

Note: General information only. The excise rate changes — always use the current rate from the ATO.

Step 1: Calculate LAL

LAL is just the volume of liquid multiplied by its alcoholic strength:

LAL = Volume in litres  ×  (ABV % ÷ 100)

Example A — a single cask

A cask holds 200 litres of whisky at 63.5% ABV:

LAL = 200 × 0.635 = 127 litres of pure alcohol

Example B — a bottling run

You bottle 600 bottles at 700 ml and 42% ABV:

Total volume = 600 × 0.7 = 420 litres
LAL = 420 × 0.42 = 176.4 litres of pure alcohol

Step 2: Apply the excise rate

Spirits over 10% ABV are taxed per litre of alcohol. Multiply LAL by the current per-LAL rate:

Excise = LAL  ×  rate per LAL

Using Example B and an illustrative rate of around $103 per LAL:

Excise = 176.4 × 103 ≈ $18,169

The rate is indexed every February and August in line with CPI, so always check the current figure rather than reusing an old one.

Step 3: Apply the remission scheme

Here's where small distilleries save. Under the Excise Remission Scheme, eligible manufacturers receive up to $350,000 per financial year of duty remitted. If you're under your cap, that ~$18,169 above could be fully remitted — meaning $0 net duty on that run.

Net excise = Excise due − remission applied (up to the annual cap)

Once you cross $350,000 of remission in a financial year, you pay full duty on everything after. See the full breakdown in our remission scheme guide.

A complete worked example

A distillery bottles 1,000 bottles at 700 ml, 45% ABV, and is well under its remission cap:

• Volume = 1,000 × 0.7 = 700 litres
• LAL = 700 × 0.45 = 315 LAL
• Excise due = 315 × ~$103 ≈ $32,445
• Remission applied (under cap) = $32,445
• Net duty payable = $0

The same run, if the distillery had already used its $350,000 cap:

• Net duty payable ≈ $32,445

That's why tracking your remaining cap through the year is so important for cash flow.

Watch-outs

• Use the current rate. It moves twice a year.
• Account for the angel's share. Evaporation reduces the LAL you ultimately bottle from a cask — see calculating angel's share.
• Don't confuse excise with GST. They're separate — see GST vs excise for distillers.
• Mind US exports. The US measures in proof gallons, not LAL — see TTB reporting for exporters.

How CaskPilot does the maths

CaskPilot calculates LAL on every distillation and bottling run automatically, applies the current excise rate, deducts your remaining remission, and shows net duty payable — then rolls it all into a monthly statement. No formulas, no stale rates, no manual cap tracking.

The bottom line

LAL = volume × ABV. Excise = LAL × rate. Net duty = excise − remission. Master those three lines and Australian spirits excise stops being mysterious.

Want it calculated for you automatically? Book a demo.