Tax on super

Super is usually the most tax effective way to invest your retirement savings. That’s because it's taxed at a much lower rate than other types of investments.

TaxTax rateHow it applies
Contributions tax 15% Paid on all employer contributions (including salary sacrifice) and personal contributions you make from before-tax income. An additional 15% tax applies if your total annual income is more than $300,000 p.a.
Tax on investment earnings Up to 15% Although the maximum tax rate is 15%, the actual amount paid is generally lower because LGIAsuper can use imputation credits from share dividends to reduce tax.
There is no tax on investment earnings.
Tax on lump sum benefit payments Varies There are two tax components:
  • a tax free component that is generally your after-tax contributions
  • a taxable component

The amount you pay on the taxable component depends on your age.

Under preservation age
Taxed at 22% including Medicare Levy

From preservation age to age 59
First $195,0001 is tax free then taxed at 17% including Medicare Levy

Age 60 plus
Full benefit is tax free
Tax on pension payments Varies

From preservation age to age 59
Taxed in the same way as income tax on salary, with some concessions. Part will be tax free if you start your pension with any tax-free component.You also receive a tax offset of 15% of your pension payment.

Age 60 plus
Full pension is tax free

1. 2016/17 threshold

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