Tax returns in retirement: Do I need to lodge one?

You might think most of your tax worries are over once you reach retirement. Unfortunately, it’s not that simple.

Many retirees find they still need to file an annual tax return as they are receiving assessable income from investments or part-time employment.

Who needs to file a tax return?

If you receive a tax-free super pension, generally you are only required to lodge a return if you receive additional income from another source, such as investments.

For part or full age pensioners, you generally only need to file a tax return if you’re receiving income on top of your regular pension payments.

Age pensioners who are fully reliant on pension payments for their retirement income are generally not required to lodge a return but still need to lodge a form with the ATO (see section below).

What taxes will I pay in retirement?

The key thing to remember is that even though you’re retired, the same tax rules apply to you as everyone else. This means you’re required to pay tax on any assessable income over the tax-free threshold ($18,200 in 2025–26), less any applicable tax offsets (such as SAPTO – see section below) and tax deductions.

In addition to income tax, you may also be liable for the Medicare levy, which is 2% of your taxable income.

Under the general tax rules, your assessable income must be declared in your tax return each year and includes:

• Income from wages or salary
• Income from investments, such as dividends or interest from savings accounts or term deposits
• Income from a business (if you are still running your own business and earn an income in any form, you must lodge a tax return)
• Rental income
• Most lump-sum payments, such as an inheritance, insurance or compensation payments
• Foreign income.

Retirees with SMSFs and other income sources in retirement

If you receive income from investments outside the super system, or are a trustee of an SMSF, filing tax returns will remain on your annual to-do list.