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Superannuation and retirement planning information

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  • How super works
    • Super for beginners
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    • Super and tax
    • Accessing super
    • Super news
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    • Super tips and strategies
    • How-to guides
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    • Superannuation glossary
  • Super funds
    • Best performing super funds
    • Super fund rankings
    • Best performing pension funds
    • Pension fund rankings
    • Super fund average returns
    • Super investing strategies
    • Comparing super funds
    • Choosing a super fund
    • Choosing an investment option
    • Super fund fees
    • Insurance and super
    • Super fund profiles
  • SMSFs
    • SMSFs for beginners
    • SMSF administration
    • SMSF checklists
    • SMSF compliance
    • SMSF investing
    • SMSF pensions
    • SMSF strategies
    • SMSF Q&As
  • Plan your retirement
    • Retirement planning for beginners
    • When should I retire?
    • How long will I live?
    • How much super do I need?
    • Will I get the Age Pension?
    • How much will I spend in retirement?
    • Financial advice
    • Retiring overseas
    • Preparing for retirement
    • Retirement planning strategies
    • Retirement calculators and reckoners
  • In retirement
    • Income in retirement
    • Super lump sums
    • Super pensions
    • Age Pension
    • Working in retirement
    • Life in retirement
    • Senior concessions and services
    • Aged care
    • Estate planning
    • Super death benefits

Home / How super works / Super and tax

Super and tax

Superannuation is intrinsically linked with tax.

Super is a tax-effective investment vehicle designed to help fund your retirement by:

  • having lower (concessional) tax rates for fund contributions and earnings
  • generally providing tax-free withdrawals once you reach your preservation age and meet a condition of release

Super is typically taxed at three stages:

  • when your contributions enter your fund,
  • when your fund earns investment income, and
  • when you withdraw benefits (though these are generally tax-free if you’re over 60).

Superannuation tax legislation can be complex. This section is designed to give you a general understanding of how super is taxed in Australia. It may also be worthwhile to seek independent professional advice based on your individual superannuation circumstances.

Note: It’s essential to provide your super fund with your tax file number, otherwise your fund is legally obliged to tax your contributions, fund earnings, and potentially withdrawals at the highest marginal tax rate (currently 47%).

Learn about the key aspects of the super and tax in the following SuperGuide articles.

Tax in SMSFs and regular super funds: Which is better?

February 11, 2021

Super for beginners: How superannuation is taxed

December 3, 2020

How the Division 293 tax works: Super surcharge for high earners

September 1, 2020

Your tax guide to accessing your super under age 60

July 16, 2020

Your tax guide to accessing your super over age 60

July 16, 2020

How do tax-deductible superannuation contributions work?

February 1, 2020

Proportioning rule and super tax: What it is and why it matters

July 12, 2019

A simple guide to what tax is payable on super death benefits

July 12, 2019

SMSFs and capital gains tax (CGT)

April 5, 2019

The definitive SMSF guide to franked dividends

April 2, 2019

Set out below are all SuperGuide articles that relate to Super and tax.

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Tax in SMSFs and regular super funds: Which is better?

February 11, 2021 by Janine Mace Leave a Comment

All super funds pay the same tax rate, but there are differences in the ability of SMSFs and large super funds to manage their tax liabilities for the benefit of members.

Super for beginners: How superannuation is taxed

December 3, 2020 by Barbara Drury Leave a Comment

This article broadly explains how superannuation is taxed, including when you make contributions, as your super grows, and when you access your super.

Income tax: Australian tax brackets and rates (2020/21)

October 9, 2020 by Barbara Drury 2 Comments

Learn the Australian income tax rates for 2019/20 and 2020/21, as well as details on how income tax is calculated, deductions, offsets and levies.

Guide to the Low and Middle Income Tax Offset (LMITO)

October 9, 2020 by Barbara Drury 2 Comments

The Low and Middle Income Tax Offset (LMITO) helps low and middle income earners lower the amount of tax they need to pay. Because it is a tax offset, it can only be used to lower the amount of tax that you owe and not to generate a tax refund or pay your Medicare Levy.

Guide to the Low Income Tax Offset (LITO)

October 9, 2020 by Barbara Drury Leave a Comment

The $700 Low Income Tax Offset (LITO), combined with the tax-free threshold of $18,200, and the Low and Middle Income Tax Offset effectively allows working Australians to earn up to $22,801 for the 2020/21 financial year before they need to pay any income tax or Medicare Levy.

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Personal income tax cuts (2018–2025): What it means for you

October 9, 2020 by Barbara Drury Leave a Comment

The Personal Income Tax Plan which provides targeted tax relief over seven years for low and middle income earners and protects middle income Australians from bracket creep consists of three steps.

How does SAPTO work? (Senior Australians and Pensioners Tax Offset)

August 11, 2020 by Barbara Drury 2 Comments

The Senior Australians and Pensioners Tax Offset (SAPTO) won’t shower you in riches. But depending on your age, relationship status and income, it could provide a handy tax offset of up to $2,230.

Your tax guide to accessing your super under age 60

July 16, 2020 by Janine Mace Leave a Comment

Although you can retire and access your super if you’re under age 60, the tax man is going to want his cut, so ensure you understand the rules before acting.

Your tax guide to accessing your super over age 60

July 16, 2020 by Janine Mace Leave a Comment

Knowing how much tax you’ll pay when you withdraw your super savings is important and the rules change once you reach age 60.

Proportioning rule and super tax: What it is and why it matters

July 12, 2019 by Janine Mace Leave a Comment

When it comes to your super benefits, tax is always at the heart of it, whether it’s when you make a contribution, or when you take your money out at the other end.

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What just happened to our tax? Here’s an explanation you’ll understand

April 5, 2019 by Peter Martin Leave a Comment

With all the announcements on tax over the past few days it’s hard to keep track. So here goes. A year ago the then treasurer Scott Morrison unveiled a “seven year personal tax”.

Capital gains and super: Using super contributions to reduce your CGT bill

February 2, 2019 by Janine Mace Leave a Comment

Super contributions can be used in many different ways when it comes to planning your finances and saving for your retirement. In the right circumstances, they can also be a very useful tool for minimising your tax bill.

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How super works
Super for beginners
Super rules
Employers guide to super
Super contributions
Super and tax
Accessing super
Super news
Women and super
Super tips and strategies
How-to guides
Super quizzes
Superannuation Q&As
Superannuation glossary
Super funds
Best performing super funds
Super fund rankings
Best performing pension funds
Pension fund rankings
Super fund average returns
Super investing strategies
Comparing super funds
Choosing a super fund
Choosing an investment option
Super fund fees
Insurance and super
Super fund profiles
SMSFs
SMSFs for beginners
SMSF administration
SMSF checklists
SMSF compliance
SMSF investing
SMSF pensions
SMSF strategies
SMSF Q&As
Plan your retirement
Retirement planning for beginners
When should I retire?
How long will I live?
How much super do I need?
Will I get the Age Pension?
How much will I spend in retirement?
Financial advice
Retiring overseas
Preparing for retirement
Retirement planning strategies
Retirement calculators and reckoners
In retirement
Income in retirement
Super lump sums
Super pensions
Age Pension
Working in retirement
Life in retirement
Senior concessions and services
Aged care
Estate planning
Super death benefits
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Compare super funds

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Superguide Pty Ltd ATF Superguide Unit Trust as a Corporate Authorised Representative (CAR) is a Corporate Authorised Representative of Independent Financial Advisers Australia, AFSL 464629

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