Tax and super

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Superannuation is concessionally taxed. Read how in our fact sheet Super taxes, caps, payments, thresholds and rebates.

Taxation of lump sum benefits from taxed funds#

Component
Tax treatment from 1 July 2008
Total benefit under $200
0%
Tax free component:
 

Contributions made after 1 July 2007 not subject to tax in the fund and the pre 1 July 2007 crystallised segment (eg. pre-July 1983, concessional, post-June 1994 invalidity, capital gains tax exempt, and undeducted contributions components)
0%

 

Taxable component:
 
  • Under preservation age
up to 20%

 

  • Between preservation age and age 60
  
    • Up to low rate threshold*
0% 
    • Over threshold*
up to 15%

 

  • Age 60 and over
0% 

 

NOTE: The government has introduced a temporary flood levy on income for the 2011-12 financial year only. Your payments may be subject to the flood levy, depending on the amount and the components of the benefit or income payment. To determine whether the flood levy will apply to a superannuation benefit or payment, we recommend that you seek professional tax advice.

# Medicare levy (currently 1.5%) is to be added to rates shown (except a nil rate).
* Threshold for 2011/2012 is $165,000, which is indexed to Average Weekly Ordinary Times Earnings in $5,000 amounts. 

As of 1 July 2007 there is no tax payable on a lump sum benefit taken, or an income stream payment received, on or after the age of 60.

Tax on amounts for those permanently departing Australia

Where a superannuation benefit is being paid to someone permanently departing Australia as a Departed Temporary Resident Payment (DASP), the withholding tax rate is:

  • 35% for a taxed element of a taxable component
  • 45% for an untaxed element of a taxable component 

Should you be contributing more to super?

Are you taking full advantage of the tax incentives that apply to superannuation?