Taxation Of Super Benefits

Member benefits - taxation of tax-free component

Super lump sum

Super income stream

Age

Amount

Max rate of tax

Tax treatment

Any age

Whole component

Not subject to tax

Not subject to tax¹

1	For capped defined benefit income streams – see Additional taxation of defined benefit income > $118,750 below for more information.

For taxation of death benefits see Taxation of super death benefits paid to a dependant and Taxation of super death benefits paid to a non-dependant in the sections below.

Member benefits - taxation of taxable component (taxed element)

Super lump sum

Super income stream

Age

Amount

Max rate of tax

Tax treatment

Aged 60 and above

Whole component is non-assessable non-exempt income (NANE)

0%

Not subject to tax¹

Below age 60

Whole component (assessable income)

20%

MTR (no tax offset²)

1	For capped defined benefit income streams – see Additional taxation of defined benefit income > $118,750 below for more information.
2	Disability superannuation income streams receive a 15% tax offset (see Superannuation pension and annuity tax offset).

For taxation of death benefits please see Taxation of super death benefits paid to a dependant and Taxation of super death benefits paid to a non-dependant in the sections below.

For all non-zero tax rates, Medicare levy may also apply.

Member benefits - taxation of taxable component (untaxed element)

	Super lump sum		Super income stream
Age	Amount	Max rate of tax	Tax treatment
Aged 60 and above	First $1.78m¹	15%²	MTR less a 10% tax offset³
Aged 60 and above	Balance over $1.78m¹	45%⁴	MTR less a 10% tax offset³
Below age 60	First $1.78m¹	30%²	MTR (no tax offset)
Below age 60	Balance over $1.78m¹	45%⁴	MTR (no tax offset)

1	$1.78 million is the 2024–25 untaxed plan cap amount, per superannuation plan, indexed annually.
2	A tax offset applies, so the taxpayer pays no more than the lower of their marginal rate and the maximum tax rate shown, to the extent that the taxable component is within the relevant cap.
3	For capped defined benefit income streams – see Additional taxation of defined benefit income > $118,750 below for more information.
4	Rates of 45% shown above are specified flat rates rather than maximum rates.

For taxation of death benefits please see Taxation of super death benefits paid to a dependant and Taxation of super death benefits paid to a non-dependant in the sections below.

For all non-zero tax rates, Medicare levy may also apply.

Additional taxation of defined benefit income > $118,750

Defined benefit income is income paid from a capped defined benefit income stream. See FirstTech Capped Defined Benefit Income Streams Guide for more information on capped defined benefit income streams.

The additional taxation in the table below only applies to defined benefit income in excess of $118,750 pa where:

the beneficiary is age 60 or over, or
the income stream is also a death benefit income stream, where the deceased member was age 60 or over at the time of death, and it is paid to a member under age 60.

Component	Standard tax concession applies if below $118,750	Additional tax treatment¹
Tax-free	Non-assessable non-exempt (NANE)	If (tax‑free + taxed element) exceeds $118,750 in an income year, then 50% x (tax free + taxed element) in excess of cap is included in assessable income
Taxable (taxed element)	Non-assessable non-exempt (NANE)
Taxable (untaxed element)	MTR less tax offset equal to 10% of the element untaxed	If the total of all components exceeds $118,750 in an income year, then the 10% offset on the untaxed element is reduced (but not below zero). Reduction = 10% x (all components - $118,750)

Component

Standard tax concession applies if below $118,750

Additional tax treatment¹

Tax-free

Non-assessable non-exempt (NANE)

If (tax‑free + taxed element) exceeds $118,750 in an income year, then 50% x (tax free + taxed element) in excess of cap is included in assessable income

Taxable (taxed element)

Non-assessable non-exempt (NANE)

Taxable (untaxed element)

MTR less tax offset equal to 10% of the element untaxed

If the total of all components exceeds $118,750 in an income year, then the 10% offset on the untaxed element is reduced (but not below zero).

Reduction = 10% x (all components - $118,750)

1	For a full explanation of the taxation of capped defined benefit income streams please see the FirstTech Super and Retirement Income Streams Guide.

Taxation of rollovers to a taxed fund

Rollover of super benefit	Tax treatment
Taxable component (untaxed element)	First $1.78m taxed at 15%¹(paid by receiving fund) Excess taxed at 47% (withheld by paying untaxed fund)
Taxable component (taxed element)	Not subject to tax when rolled over
Tax-free component	Not subject to tax when rolled over

Rollover of super benefit

Tax treatment

Taxable component (untaxed element)

First $1.78m taxed at 15%¹(paid by receiving fund)
Excess taxed at 47% (withheld by paying untaxed fund)

Taxable component (taxed element)

Not subject to tax when rolled over

Tax-free component

Not subject to tax when rolled over

1	Medicare levy does not apply.

See Death benefit rollovers in the FirstTech Super and Retirement Income Streams Guide for the special treatment of rollovers of super death benefit income streams.

Super death benefits - taxation when paid to a dependant

Age of deceased	Type of death benefit	Age of dependant	Taxation of taxable component
Any age	Lump sum	Any age	Not subject to tax
Aged 60 and above	Income stream	Any age	Taxed element: Not subject to tax Untaxed element: MTR less 10% tax offset¹
Below age 60	Income stream	Age 60 and above	Taxed element: Not subject to tax Untaxed element: MTR less 10% tax offset¹
Below age 60	Income stream	Below age 60	Taxed element: MTR less 15% tax offset Untaxed element: MTR

Age of deceased

Type of death benefit

Age of dependant

Taxation of taxable component

Any age

Lump sum

Any age

Not subject to tax

Aged 60 and above

Income stream

Any age

Taxed element: Not subject to tax

Untaxed element: MTR less 10% tax offset¹

Below age 60

Income stream

Age 60 and above

Taxed element: Not subject to tax

Untaxed element: MTR less 10% tax offset¹

Below age 60

Income stream

Below age 60

Taxed element: MTR less 15% tax offset

Untaxed element: MTR

1	For capped defined benefit income streams – see Additional taxation of defined benefit income > $118,750 above for more information.

A dependant for tax purposes is a spouse, including a de facto or a former spouse, a child under the age of 18, a financial dependant or a person in an interdependency relationship.

The tax-free component is non-assessable, non-exempt income and is not subject to tax.

Super death benefits - taxation when paid to a non-dependant

Age of deceased	Type of death benefit	Age of non-dependant	Taxation of taxable component
Any age	Lump sum	Any age	Taxed element: 15% Untaxed element: 30%
Any age	Income stream	Any age	Not permitted after 1 July 2007 Death benefit income streams commenced prior to 1 July 2007 will be taxed in the same manner as if paid to a 'dependant'

Age of deceased

Type of death benefit

Age of non-dependant

Taxation of taxable component

Any age

Lump sum

Any age

Taxed element: 15%

Untaxed element: 30%

Any age

Income stream

Any age

Not permitted after 1 July 2007

Death benefit income streams commenced prior to 1 July 2007 will be taxed in the same manner as if paid to a 'dependant'

For capped defined benefit income streams – see Additional taxation of defined benefit income > $118,750 above for more information.

For all non-zero tax rates, Medicare levy may also apply.

The tax-free component is non-assessable non-exempt income, and is not subject to tax.