Super and tax

How-super-is-taxed

When it comes to super, there are a number of rules and regulations that impact your tax position.

Don't pay more tax than you have toIt's important to give us your tax file number (TFN). If you don't, you could end up paying an additional 32% tax on your super contributions.

What's more, if you haven’t given us your TFN:

Giving us your TFN is easy. Simply log in to your account and go to the ‘Personal details’ page.

The way your super gets taxed depends on a number of factors, including how you made the contribution, i.e. before or after you've been paid.

Concessional (before-tax) contributions

Concessional contributions you make to your super are taxed at 15%.

This assumes you don’t go over the concessional contributions cap, you don’t have to pay the Division 293 tax, and you’ve provided your Tax File Number (TFN).

If your contributions go over the cap, the excess amount will be included in your assessable income and taxed at your marginal rate at the end of the financial year.

You’ll be entitled to a 15% tax offset for the contributions tax you’ve already paid and you may also be liable to pay an excess concessional contributions charge imposed by the Australian Taxation Office (ATO).

You can visit the ATO's website for more information.

What if I'm in the Defined Benefit Division (DBD)?

If you're a DBD member, we calculate your concessional contributions to the DBD using a formula. Notional Taxed Contributions (NTCs) are the notional amount of contributions (excluding after-tax member contributions) that relate to your defined benefit component.

To see the value of each component of your DBD formula, including NTCs and what we report to the ATO, log into your account. You can also check out the following fact sheets to learn more about how the concessional contributions cap applies:

Non-concessional (after-tax) contributions

If you make contributions to your super from your take-home pay, they’re generally not taxed up to the current cap. If you exceed this cap, you can choose to withdraw the excess contributions and any earnings. The earnings are then included in your income tax assessment and taxed at your marginal rate. If you don’t withdraw the earnings, the excess is taxed at 47%.

If your contributions go over both contributions caps in a financial year, the excess amount could be taxed at up to 94%—unless you request to release the excess contributions from your super account.

Tax on rollovers

No tax is payable if you roll over, or transfer, your benefit from one super fund to another—unless the amount contains an untaxed element. An untaxed element attracts the 15% contributions tax when the fund receives it.

Tax on investment earnings

Investment earnings for accumulation and Transition to Retirement (TTR) accounts are generally taxed at up to 15% which is deducted from the earnings before they’re allocated to your account.

If you just have a Flexi Pension account, you don’t pay tax on investment earnings held in that account.

Tax on withdrawals

You may have to pay tax when you withdraw your benefit but the amount of tax you’ll pay depends on your circumstances, such as your age and how your benefit is paid to you.

For example, if you’re 60 or over, your benefit payment will generally be tax-free if it’s paid as a lump sum.

If you take your benefit before age 60, tax may apply to your payment.

If you've reached your preservation age, you’ll pay tax on the taxable component of your lump sum benefit in excess of the low rate threshold.

If you're under your preservation age when you take your lump sum benefit, tax will generally be applied to the entire taxable component at a rate of 22%, including the Medicare levy.

If your benefit includes an untaxed element, additional tax will apply.

Additional tax for high income earners

An additional tax is charged on concessional contributions made by, or on behalf of, high income earners. This additional tax is known as the Division 293 tax.

It's an additional rate of 15% on individuals whose income and relevant concessionally-taxed contributions is more than $250,000 per year.

If applicable, the Division 293 tax applies to the lower of:

  • your low tax contributions, and
  • the sum of the your income for surcharge purposes (less reportable superannuation contributions) and low tax contributions above the $250,000 threshold.

Former temporary residents who receive a Departing Australia Superannuation Payment (DASP) are entitled to a refund of any Division 293 tax paid.

You can visit the ATO's website or call us on 1800 331 685 for more information about the Division 293 tax and its assessment process.

Tax and spouse contributions

Your spouse can make after-tax contributions to your UniSuper account on your behalf and may be eligible to receive an 18% tax offset on spouse contributions they make for you of up to $3,000.

This is subject to eligibility requirements and depends on the level of your assessable income and reportable fringe benefits and reportable super contributions. Both you and your spouse must also be Australian residents when the contribution is made.

Eligibility

Your spouse won't be eligible for the tax offset if you’ve exceeded your non-concessional contributions cap for the relevant year or your total super balance is equal to or more than the general transfer balance cap (currently $1.6 million).

The maximum spouse contribution tax offset of $540 is available where contributions of up to $3,000 are made on behalf of your spouse in an income year, and if the income threshold of your spouse doesn’t exceed $37,000.

If your spouse’s income is more than $37,000, the tax offset will gradually reduce and will completely phase out once the income level of your spouse reaches $40,000.

To find out more, read How your super is taxed (PDF, 1.1MB) visit the ATO's website or call us on 1800 331 685.