Superannuation only exists because of how super savings are taxed. Superannuation savings receive tax incentives to encourage Australians to choose super as a retirement savings option. Even so, superannuation is still taxed (for most Australians), but at a lower rate of tax than non-superannuation income and savings.
The tax treatment of superannuation can be confusing but in short, your superannuation benefit can be taxed at three stages:
- When making super contributions
- When a super fund earns income
- When receiving super benefits
Tip: For a broader explanation of how super works (rather than just the super tax rules), see our summary beginner SuperGuide articles Super for beginners: A starting guide and Superannuation investing: How does it all work? .