Lump Sum Super Payments – What to Declare

August 2025

What Is a Lump Sum Super Payment?

A lump sum super payment is a one-off withdrawal from your super fund. Unlike a regular pension or income stream, it’s a single payment — often taken when you retire, reach preservation age, or qualify under conditions like financial hardship or permanent incapacity.

How Are Lump Sum Super Payments Taxed?

Tax treatment depends on your age, your super components, and whether your fund is complying.

1. Tax-Free Component

• This part is always tax-free — no matter your age.

2. Taxable Component

• 60 or over: Tax-free if your fund is complying.

• Under 60:

  • First $235,000 (low rate cap for 2023–24) taxed at 0%.

  • Anything above that is taxed at 17% (includes Medicare levy).

• Under preservation age: The entire taxable part is taxed at 22% (includes Medicare levy).

3. Untaxed Funds

• Payments from untaxed funds (usually government) attract higher tax rates.

What Do You Declare in Your Tax Return?

• 60 or over with a complying fund: Usually no need to declare — ATO gets the info direct.

• Under 60 or from an untaxed fund: You’ll receive a PAYG payment summary – superannuation lump sum. Use it to fill out the super section of your return.

What Records Should You Keep?

• Your PAYG payment summary (if applicable)

• Super fund statements showing taxable and tax-free breakdowns

• Proof of age and date the payment was received

Keep these for at least five years.

Gotax Online FAQ – Real Questions, Real Fast

Q: I’m 61 and got a lump sum from super. Do I pay tax?
A: If it’s from a complying fund — no tax. You’re in the clear.

Q: I’m 58. How’s my lump sum taxed?
A: First $235,000 of the taxable component is tax-free. Anything above that is taxed at 17%. Under preservation age? Taxed at 22%.

Q: What’s the tax-free component?
A: Usually your after-tax contributions. That part’s always tax-free.

Q: Do I need to declare the lump sum?
A: If you’re under 60, yes. If 60+, the ATO may already have it — but double-check your return.

Q: It’s from a government fund. Do I pay more tax?
A: Yes. Untaxed funds usually mean higher tax. Check your payment summary.

Bottom line:
Lump sum super payments can be tax-free or taxed depending on your age, fund type, and amount. Review your summary, understand the split, and declare it right. When in doubt, ask Derek below.

Let GoTax Handle It For You

GoTax Online helps you declare your lump sum payments correctly. Just answer a few simple prompts and we’ll guide you through the whole process.

Easy. Accurate. Done.

Start your return now: www.gotax.com.au/guest-user

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