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Tax and Super: How Is Super Taxed ?

Superannuation is a tax-effective way to save for retirement. Contributions to super are taxed at different rates depending on the type of contribution and the individual's income. Earnings on investments in super funds are taxed at a maximum of 15%. Withdrawals from super funds are tax-free for those over 60 years of age, but some tax may apply on withdrawals for those under 60 years of age. Individuals may be eligible for tax deductions on personal super contributions depending on their employment status. Providing a tax file number is important to receive all tax benefits of superannuation.

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78 views2 pages

Tax and Super: How Is Super Taxed ?

Superannuation is a tax-effective way to save for retirement. Contributions to super are taxed at different rates depending on the type of contribution and the individual's income. Earnings on investments in super funds are taxed at a maximum of 15%. Withdrawals from super funds are tax-free for those over 60 years of age, but some tax may apply on withdrawals for those under 60 years of age. Individuals may be eligible for tax deductions on personal super contributions depending on their employment status. Providing a tax file number is important to receive all tax benefits of superannuation.

Uploaded by

khilanvekaria
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Tax and super

Super is a tax effective way to invest and save for retirement. Mostof us
will pay less tax on money we put into super and if you access your super
after age 60, youll pay no tax on your super benefit
How is super taxed?
Super is taxed in three different ways:

when you make a before-tax contribution


on investment earnings, and
when you withdraw super.
Tax when you contribute to super

Not all of the money contributed to super is taxed - it depends how the money has been taxed before it goes into the fund.
Somesuper funds - like some Government or public sector funds - are untaxed funds. If you have super in an untaxed fund,
theresno tax payable while your super accumulates but you will pay additional tax when you withdraw your super. AustralianSuper,
like most other funds, is a taxed fund, and all before-tax contributions are taxed when we receive them.
Type of contribution

Tax rate

Details

Before-tax, aged less than 59 years


on1 July 2013
These are mainly employer
contributions, salary sacrifice
contributions and contributions made
by self-employed people.

15% or 30%
depending on your
income

Before-tax contributions are taxed at 15% unless you are a high-income


earner, where the tax rate is 30%. See the Tax for high-income earners
section of this fact sheet for details.
You can add $25,000 to your super before tax. Any amounts over this limit
will be taxed at your personal tax rate*, plus an interest charge.

Before tax, aged 59 years or more


on1July2013
These are mainly employer
contributions, salary sacrifice
contributions and contributions made
by self-employed people.

15% or 30%
depending on your
income

Before-tax contributions are taxed at 15% unless you are a high-income


earner, where the tax rate is 30%. See the Tax for high-income earners
section of this fact sheet for details.
You can add $35,000 to your super before tax. Any amounts over this limit
will be taxed at your personal tax rate*, plus an interest charge.

After-tax
These are typically extra, voluntary
contributions you make from after-tax
money. Spouse contributions fall into
this category too. You must give us
your Tax File Number before we can
accept after-tax contributions.

No tax payable up to
allowable limits

You can contribute up to $150,000 each year. If under age 65, you can
contribute up to $450,000 tax-free in a three-year period. The three year
period automatically starts from the first year that you add more than
$150,000 after-tax to your super.
Any contributions over $450,000 in that three-year period will be taxed
at46.5%*.

Government co-contribution

No tax payable

To be eligible for a Government co-contribution, you need to add to your


super after tax and earn less than $48,516. The co-contribution itself is not
taxable either when it goes into your super, or when you withdraw your super.
For more information on the Government co-contribution arrangements
visitour website at www.australiansuper.com/cocontributions

* Including Medicare levy

AustralianSuper

page 1 of 2

Tax for high income earners


If youre a high income earner with an adjusted taxable income of more than $300,000 a year, the tax on your before-tax contributions
is30%.
If your income is less than $300,000 a year, but by including your before-tax contributions the total is more than $300,000, the 30%
taxrate will apply to the part of your before-tax contributions that are over $300,000.
For example, if your income is $280,000 and your before-tax contributions are $25,000, you only pay the 30% tax rate on $5,000.

Tax on investment earnings and withdrawals


Tax is payable on your investment earnings in super and if youre under age 60 and you withdraw your super.
What

Tax rate

Details

Investment earnings

Up to 15%

This tax is deducted from the crediting rate (the interest rate that applies
to your investments) along with investment management fees before the
earnings areapplied to your account.

Withdrawals from
AustralianSuper
(if youre age 60
andover)

No tax payable

Both cash lump sum withdrawals and any pension payments you
receive will generally be tax-free.

Withdrawals from
AustralianSuper
(ifyoure under
age60)

Tax-free component
No tax payable
Taxable component
Under age 55 21.5% tax
(including the Medicare levy)
Between 55 and 59 the first $180,000
is tax-free. The balance is taxed at 16.5%
(including the Medicarelevy)

Cash lump sum withdrawals (where youre eligible to receive your super
benefit) are divided into a tax-free and a taxable component.
These components are calculated from the type of contributions that
have been made to your account.
To find out how much of your super is tax-free and how much is
taxable you can get a benefit quote from your online account at
www.australiansuper.com or call us on 1300300273.

Tax deductions: are you eligible?


You might be eligible to claim a tax deduction on the money youve contributed to super, if you are:
employed and your employer is not providing, and hasnoobligation to provide, super contributions
entirely self-employed, or
substantially self-employed where, generally, theassessable income plus reportable fringe benefits and any reportable employer
super contributions you receive are less than10% ofyour total assessable income.
If you think youre eligible to claim a tax deduction
foryour super contributions visit our website at
www.australiansuper.com/selfemployed

If youd like more information, see our Claiming a tax deduction for personal contributions fact sheet. Ifyou want to claim a tax
deduction for your contributions youll need to complete the tax deduction claim form that is available from our website link above
and send this form to us.
If you need more information you could also visit theAustralian Taxation Office (ATO) website at www.ato.gov.au/super, whichhas
alot of informationon super and tax.

An important note about Tax File Numbers

This document was prepared by AustralianSuper in September 2013 by AustralianSuper Pty Ltd ABN 94 006 457 987 AFSL 233788,
TrusteeofAustralianSuper ABN 65 714 394 898 and may contain general financial advice that does not take into account your personal objectives,
situationor needs. Before making a decision about AustralianSuper, consider your financial requirements and read the Product Disclosure Statement,
availableatwww.australiansuper.com/forms or by calling 1300 300 273.
page 2 of 2

www.australiansuper.com

20005 09/13

To get the benefit of super tax savings or be eligible for


the Government co-contribution, you must give us your
Tax File Number (TFN). If you dont give us your TFN,
youll pay 46.5% tax (including the Medicare levy).

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