Types of superannuation tax
Contributions tax
Investment earnings tax
Withdrawals tax
How super contributions are taxed
Before-tax contributions
Employer contributions are generally taxed at 15%. Salary sacrifice contributions (before-tax or concessional contributions) are generally taxed at the same rate.
Exceptions:
- Earning $37,000 or less: you may be eligible for a tax offset of 15% of your total before-tax super contributions you or your employer pay into your super account up to a maximum of $500 through the low-income super tax offset (LISTO). From 1 July 2027, the LISTO eligibility cap will increase from $37,000 to $45,000, and the maximum payment will be boosted from $500 to $810.
- If you earn more than $250,0001: an additional 15% tax will apply to your before-tax contributions, to that extent.
- If you go over your concessional contributions cap of $32,500: anything over this amount will be taxed at your marginal tax rate plus Medicare levy, less a 15% non-refundable tax offset. You can elect to have up to 85% of the excess concessional contributions released from super to pay your income tax liability and will only be charged additional tax on the excess over the threshold. Contributions made to other super accounts also count towards your cap. You can carry forward any unused portion of the concessional contributions cap for up to five previous financial years if your total superannuation balance is less than $500,000 on 30 June of the previous financial year (this includes your AustralianSuper account and other super accounts held in your name). To view total contributions across all of your super accounts, log into your MyGov account. You can track contributions made to your AustralianSuper account by logging into your account online, or in the AustralianSuper mobile app.
After-tax contributions
If you make after-tax contributions (non-concessional contributions), you won’t pay any contributions tax on those amounts. The exception to this is if you exceed the non-concessional contributions cap (currently $130,000). Any excess amounts over the cap will be taxed at 47%, unless you withdraw them and 85% of the associated earnings.
If eligible, you may be able to contribute an extra two years’ worth of after-tax contributions (i.e. up to $390,000). This is known as the bring-forward rule. The amount which can be contributed depends on total superannuation balance (TSB) as at 30 June of the previous financial year and age at the time the contribution is received by the fund.
Contributions made to all super accounts count towards your cap. To view total contributions across all your super accounts, log into your MyGov account. You can track contributions made to your AustralianSuper account only by logging into your account online, or in the AustralianSuper mobile app.
Tax on super contribution types
| Contribution type | Percentage of tax you generally pay on your super |
|---|---|
| Employer contributions | 15% |
| Salary sacrifice | 15% |
| Personal contributions | 0% |
| After-tax contributions you’ve claimed a tax deduction for | 15% |
| Spouse contribution | 0% |
| Government co-contribution | 0% |
| Transferring super* | 0% |
* If members are transferring super from an untaxed fund to a taxed fund, contributions tax will be deducted at this time.
How super investment earnings are taxed
Your super and Transition to Retirement investment earnings are taxed at up to 15% via a deduction from the crediting rate of the relevant investment option before investment returns are credited to your account, or for the Member Direct investment option, tax is deducted from your Member Direct Cash account.
Your Choice Income investment earnings are not taxed by AustralianSuper.
If your total superannuation balance (TSB) across all super funds exceeds $3 million at 30 June 2027, an additional 15% tax will apply on your realised investment earnings relating to your TSB between $3 million and $10 million for the 2026/27 financial year. If your TSB exceeds $10 million at 30 June 2027, an additional 25% tax will apply on your realised investment earnings relating to your TSB above $10 million for the 2026/27 financial year. Any net realised capital gains will be discounted by 80% when arriving at your realised investment earnings relating to your TSB above the relevant thresholds for the 2026/27 financial year.
This additional tax is assessed to you personally by the Australian Taxation Office (ATO) and you can choose to pay it from your personal funds or release it from your super. This additional tax is referred to as Division 296 tax or Div 296 tax.
How super withdrawals are taxed
The amount of tax you pay on your withdrawals depends on whether you’re withdrawing super as:
- an income stream, like AustralianSuper’s Choice Income, or
- a lump sum.
If you are under the age of 60 you may need to pay some tax, which we will deduct from the payment amount. If you’re 60 and over, withdrawals are generally tax-free.
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Super income stream
This is when you withdraw funds from your super as a regular income. Our Choice Income account-based pension is an example of an income stream. It is available to set up when you’re over 60 and retired. If you’re over 60, income payments are generally tax-free.
Some people may be eligible for an income stream under the age of 60 and these payments are generally taxed. View the Tax and super fact sheet.
Learn more about our account-based pension, Choice Income.
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Lump sum withdrawals
There are a few different ways that your lump sum withdrawal may be taxed.
If you withdraw a lump sum and you:
- are over 60
- you don’t pay tax when you withdraw from a taxed super fund (like AustralianSuper).
- you may pay tax if you withdraw from untaxed super funds (like a public sector fund).
- are under 60
- you pay 22% (including the Medicare levy) or your marginal tax rate – whichever is lower – on the taxed element of the taxable component of your withdrawal.
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When someone dies
A death benefit payment includes a member’s account balance(s), minus any applicable fees and taxes, along with any death insurance cover they may have had. A member’s super death benefit can be paid to one or more of their dependants as defined by superannuation law and/or their legal personal representative. The amount of tax the death benefit recipient(s) will pay on a death benefit depends on:
- the tax-free and taxable components of the super
- whether the beneficiary is a dependant for tax purposes
- whether the benefits are taken as an income stream or a lump sum
Read our Applying for a payment when a member dies fact sheet to learn more.
Seeking financial advice
Consider speaking to financial adviser to help you make informed decisions that align with your financial goals2.
Your advice options-
Disclaimers
- If your adjusted taxable income (including your before-tax contributions) is more than $250,000 a year, an additional tax of 15% will apply on your before-tax contributions. If your income is less than $250,000 a year, but by including your before-tax contributions the total is more than $250,000, the additional 15% tax rate will apply to the part of your before-tax contributions that are over $250,000. This additional tax is assessed to you personally by the Australian Taxation Office (ATO) and you can choose to pay if from your personal funds or release it from your super. This extra 15% tax is referred to as Division 293 tax or Div 293 tax.
- Personal financial product advice is provided under the Australian Financial Services Licence held by a third party and not by AustralianSuper Pty Ltd. Fees may apply.