How much tax do I pay on my super?
Some contributions, interest and withdrawals are taxed.
Most benefits are preserved (contributions after 30 June 1999) or restricted non-preserved (contributions you made between 1 July 1983 and 30 June 1999) and can only be withdrawn if a condition of release is met. Typical conditions of release are;
- Reaching preservation age and retiring
- Reaching age 65 even if not retired.
- Reaching preservation age and starting a TTR (Transition To Retirement) pension.
|Date of birth||Preservation age|
|Before 1 July 1960||55 years|
|1 July 1960 to 30 June 1961||56 years|
|1 July 1961 to 30 June 1962||57 years|
|1 July 1962 to 30 June 1963||58 years|
|1 July 1963 to 30 June 1964||59 years|
|From 1 July 1964||60 years|
A partial withdrawal may be allowed for;
- Terminating gainful employment
- Severe financial hardship.
- Compassionate grounds
- Terminal medical condition
- under 60 years of age and ceasing gainful employment with no intention to become gainfully employed in the future.
- at least 60 years of age and leaving a job.
Reaching preservation age and retiring
Under age 60 and taking the benefit as a lump sum
The first $195,000 withdrawn as well as any tax free component are not taxed. A tax-free component is the post-tax contributions you made as well as some pre July 2007 components.
The balance of the withdrawal is taxed at 15% (plus Medicare).
This assumes the fund was a complying fund taxed in the normal way. “Untaxed funds” are far more rare and withdrawals from these funds are taxed at a higher rate.
Under age 60 and taking the benefit as a pension
The tax free component will remain untaxed as a pension. The taxable component is added to taxable income and taxed at marginal rates. There will be a 15% offset on this component however which should reduce or even remove any tax payable.
Below preservation age
If you are able to access your super before reaching preservation age (severe financial hardship for example) then the tax free component pays no tax and the balance (if any) is taxed at 20%.