Tax Blogs

Do I pay Tax on my Super?

June 7, 2021

Well, Yes and No, it all depends on your circumstances.

There are some awesome tax perks to contributing to your super fund! In addition to that, you'll be building your nest egg for retirement.

Money going into Super

In simple terms, the money that your employer pays into super on your behalf as superannuation guarantee or salary sacrificed amounts, is taxed at 15% when it is put into the fund. This is called a concessional contribution.

Don’t worry, the super fund pays it for you, so you don’t have to put your hand in your pocket for the tax.

If you put extra money into your super fund that you have already paid tax on (not salary sacrificed or claimed a deduction for in your tax return) then the money is not taxed again. This is called a non-concessional contribution.

High income individuals with income for Medicare levy surcharge purposes less your reportable super contributions and low tax contributions over $250,000 (previously $300,000) will be taxed an extra 15% after they lodge their income tax return. This is called Division 293 tax and is an extra tax on your super, designed to make it fairer for all taxpayers.  Before Division 293 started, high income individuals were receiving a much larger tax benefit for putting money into their super funds than those in the lower tax brackets.

Taking money out of super

The amount of tax you must pay when you withdraw taxable super depends on your age and whether your fund paid tax on it. Some is tax free and some is taxable. The rules are quite complex so you should contact us, and we will put you in contact with our licensed financial planner (link to Garden?) that can assist you with any decision making regarding your super.

Easy Online Tax Returns

Before Retirement

Generally, you can access your super money when you retire. However, there are some circumstances where you can access your super savings early, such as severe financial hardship and specific medical conditions. In these circumstances, you will have to pay tax on the money withdrawn, in your individual tax return. The fund will withhold some money (and give you a payment summary), that should be enough to cover the tax on the withdrawal. So, make sure you put in a tax return even if you have no other income as you may be due a tax refund of some, or all of this withheld tax, depending on your individual circumstances.

At Retirement

If you take money from super after you turn 60 (and have retired), and the fund has paid tax on it inside the fund, then it should be tax free when you take it out.

Money in your super fund, that a super pension is being paid from doesn’t attract tax in the fund any more.


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Note that the information provided is general in nature and subject to change, please contact one of our professionals who can evaluate your circumstances and provide more accurate advice to your current situation.


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