Background Informal carers suffer from worse health outcomes than non-carers due to their caregiving role. Yet, in a society carers health is as important as that of their care recipients. This study investigated the self-assessed mental and general health outcomes of informal carers in Australia. It evaluated the influence of carers' personal social capital- a logically linked sequence of their social behaviour such as community participation, social support and trust in others- on their health outcomes. The study estimated the magnitude of small area level variation at Statistical Area Level 1 (SA1) along with individual level variation in carers' health outcomes. Methods The study used a multilevel mixed effects cross-sectional design using data from the Household Income and Labour Dynamics of Australia survey, wave 14. It included Australians aged 15years and older that were surveyed in the year 2014. The sample consisted of 12,767 individuals and 5004 SA1s. The outcome measures included- mental health, general health and physical functioning, domains of the Short Form 36 Questionnaire, a widely used multi-dimensional measure of health-related quality of life. Results Informal carers suffered from poor mental (Beta=-0.587, p=0.003) and general health (Beta=-0.670, p=0.001) outcomes compared to non-carers in Australia. These health outcomes exhibited significant variation acrossSA1s in Australia, with 12-13% variation in general and mental health. However, within small local areas, differences at the individual level, accounted for most of the variation in outcomes. Moreover, levels of community participation, personal social connection and trust, as perceived by individuals in the communities, had a positive influence on both mental and general health of carers and non-carers, and were more beneficial for carers compared to non-carers. Conclusion It seems that the positive influence of social capital for carers helps them in coping with the negative impact of their caregiving duty on health outcomes. Findings suggested that some targeted community support programs for carers to build on their personal social cohesion and trust in their community could help in improving their poor health profiles. Moreover, improved informal carers' health may help the health system in better managing their resources.