To work out how your super withdrawal will be taxed will depend on a number of factors:
- your preservation age and the age you will be when you get the payment
- whether you will get the payment as an income stream or lump sum
- the type of super income stream you receive
- whether the money in your super account is tax-free or taxable
- whether you are receiving a death benefit income stream
- whether you exceed the following caps
- defined benefit income cap
- low rate cap
- untaxed plan cap amount
Once these are known, we will be able to determine if any tax is applicable or if any tax offsets will apply.
With many different variables in how you may receive or access superannuation funds, we will focus on the most common, being an account-based pension.
If you are over 60 and are able to begin or in receipt of an account-based pension, the income/payments you receive will be tax free.Lump sum withdrawals will also be tax free.
If you have reached your preservation age but are under the age of 60, the amount of tax you pay will depend on the taxable components of your fund. See chart below. Any tax free components will not be subject to tax.
|
Type of Super |
Type of Withdrawal |
Effective Tax Rate (including Medicare levy, up to the low rate cap) |
Effective Tax Rate (including Medicare levy, above the low rate cap) |
|
Taxable component – taxed element |
Income stream |
Your marginal tax rate less 15% tax offset |
Your marginal tax rate less 15% tax offset |
|
Taxable component – taxed element |
Lump sum |
0% |
Your marginal tax rate or 17%, whichever is lower |
|
Taxable component – untaxed element |
Income stream |
Your marginal tax rate |
Your marginal tax rate |
|
Taxable component – untaxed element |
Lump sum |
Your marginal tax rate or 17%, whichever is lower |
Your marginal tax rate or 32%, whichever is lower – unless the sum of the untaxed elements of all super lump sum benefits received under the super plan exceeds the untaxed plan cap. Amounts above the cap will be taxed at the top marginal rate. The untaxed plan cap applies separately to each super provider you receive super lump sums from. |