The tax payable on your super contributions and benefits is dependent on a number of factors. Information on this can be found below.
Tax is payable on super contributions:
- if contributions are made before tax;
- if you exceed the super contribution limits; or
- if you are a high-income earner.
Contributions that are made before income tax (concessional) are taxed at 15%. Examples of before-tax contributions include employer contributions, such as compulsory employer contributions and salary sacrifice payments made to your super fund or personal contributions that you claim as an income tax deduction.
After-tax contributions are contributions that you make after income tax (non-concessional) and these are not subject to tax. Examples of after-tax contributions include contributions that you make from your after-tax income, contributions that your spouse makes to your super fund, or personal contributions that are not claimed as an income tax deduction.
Limits apply to the amount of before-tax and after-tax contributions you can make each year before you pay additional tax, and these may vary depending on the financial year and your age. Contributing too much to your super may mean you have to pay extra tax. More information on excess contributions tax can be found on the ATO website or the Contributions Fact Sheet.
There is an additional tax on your super contributions that applies if your combined income and super contributions are above the threshold. From 1 July 2017, the threshold was reduced to $250.000. The tax is 15% of your taxable concessional contributions above the $250,000 threshold. For more information on tax for high income earners, visit the ATO website, or refer to the Contributions Fact Sheet.
Tax payable on your super benefits generally depends on the following factors:
- your age;
- whether your super comes from a taxed or untaxed source; and
- whether your benefits are paid as a lump sum or an income stream.
The above factors determine whether you:
- pay tax on your withdrawal (e.g. taxable income); or
- get tax offsets that reduce the amount of tax you pay.
Your super benefits will generally include both a taxable and a tax-free component. For more information on tax payable on your super benefits, visit the ATO website or read our How super is taxed Fact Sheet.