How is Super Taxed | AustralianSuper

Types of superannuation tax

Understanding how your super is taxed can help ensure you’re not paying more tax on your super than you need to. This could affect how much super you save and how much you eventually have when you retire. Taxes that may apply to your super include:

Contributions tax

Contributions made by your employer or via salary sacrifice are generally taxed at 15%. If your income and super contributions exceed certain thresholds, additional taxes may apply.

Investment earnings tax

Your super investment earnings, including interest and dividends, can be taxed up to 15%. This could be lower than the tax rate you’ll pay on investment earnings outside of super.

Withdrawals tax

Super withdrawals get divided into tax-free and taxable components. This depends on whether your contributions were made as after-tax or before-tax contributions.

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).
If you earn more than $250,000¹: your before-tax contributions will be taxed at 30%, to that extent.
If you go over your concessional contributions cap of $30,000: anything over this amount will be taxed at your marginal tax rate plus Medicare levy, less a 15% 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. 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 $120,000). Any excess amounts over the cap will be taxed at 47%, unless you withdraw them and 85% of the associated earnings.

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%
Investment earnings (super & Transition to Retirement)	15%
Investment earnings on retirement income	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 earnings are taxed at 15%, including interest and dividends, less any tax deductions or credits you may be eligible for.

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.

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 (such as through disability) and these payments are generally taxed. View the Tax and super fact sheet.

Learn more about our account-based pension, Choice Income.
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
- are under 60
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

Important information to consider
1. If your adjusted taxable income (including your before-tax contributions) is more than $250,000 per year, your before-tax contributions will be taxed at 30%, to that extent. This extra 15% tax is referred to as Division 293 tax or Div 293 tax. Find out more at  ato.gov.au/tax-rates-and-codes/key-superannuation-rates-and-thresholds
2. 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.