SuperGuide

Simple superannuation and retirement planning information

Super and tax

A Super Guide

A superannuation fund is not an investment: rather it is a structure — a tax-effective investment structure. The tax incentives that make superannuation attractive as a savings and investment vehicle, are also the same features that make super so complex.

An appropriate question to ask, is whether the tax savings offered by a super fund structure justify shifting some, most or all of your savings into a superannuation fund.

Essentially, a superannuation account is an investment account that you cannot access until a certain age (and/or you satisfy certain conditions), which is generally taxed at a lower rate than most Australians pay in income tax. For lower-income earners however, superannuation also offers some incentives, such as the Low Income Superannuation Tax Offset (more a tax compensation measure than an incentive) and the Co-contribution Scheme.

Find out how your superannuation is taxed, including what happens if you retire before the age of 60, the tax-free benefits on or after the age of 60, how the earnings on your super savings are taxed, including the tax treatment of your super’s investment earnings in retirement phase.

You can discover how your super contributions are taxed, and the tax implications of leaving your super benefits to family or friends when you die.

You can also learn some of the popular tax-effective super strategies, including how the super tax rules affect SMSFs.

Note: From 1 July 2017, the federal government introduced a transfer balance cap, which is a limit on the amount of super that can be transferred into retirement phase, and essentially limits the amount of tax-exempt earnings a super account can enjoy (see SuperGuide article Retirement phase: A super guide to the $1.6 million transfer balance cap).

Click on the links directly below to access the following topics about superannuation and tax:

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

Want to make 50% return on your super contribution?

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If you earn less than $53,000 or so a year, or your spouse or children earn less than $53,000 or so a year, then you, or your spouse, or child, have an opportunity to potentially make a 50% return on your money when you make an after-tax super contribution to your super fund. Read on to find out how you can turn ... Read more

Making super contributions: Aged 65 years or older

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Q: From reading SuperGuide articles, I can see that since July 2017, there is no longer a special contributions cap for people between 50 and 74 years, but a general concessional contribution cap of $25,000 a year for all age groups. I can also see that for non-concessional contributions, the cap is now $100,000. Is ... Read more

Excess contributions rules: A quick summary

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If you plan to make superannuation contributions to a super fund, you need to be mindful of the contributions caps for both concessional (before tax) contributions and for non-concessional (after-tax) contributions. You also need to understand the financial (or other) consequences of exceeding those contributions ... Read more

Employees can now make tax-deductible super contributions

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As an employee, the general rule when making super contributions is, you can take advantage of the concessional (before-tax) contributions rules by salary sacrificing, or by making tax-deductible super contributions. If you’re self-employed, you can take advantage of the concessional contributions rules by making ... Read more