With only a few weeks remaining before the end of the 2018/2019 financial year, it’s time to ensure you have your super affairs in order and all your paperwork is ready for the big day when you lodge your income tax return. To help ensure you have maximised the tax benefits available within the super system, here’s ... Read more
Super and tax
A Super Guide
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%).
The following sections focus on specific areas about tax and superannuation:
- Contributions tax
- Investment income tax (earnings tax)
- Retirement phase
- Superannuation benefit payments tax
- Superannuation death benefits
Learn more about the key aspects about tax and super in the following SuperGuide articles:
Set out below are all SuperGuide articles that relate to Super and tax.
What are the super and Age Pension rules for same-sex couples?
Australia has seen some momentous changes when it comes to the recognition of same-sex relationships in recent years, with the passage of the same-sex marriage legislation in December 2017 marking one of the most significant milestones. The new legislation has had less impact when it comes to super than in many other ... Read more
What are defined benefit super funds?
There’s lots of jargon in the super system and even when it comes to something as simple as the different types of super funds, it can be hard to know what they are and how they work. One of the key differences you need to understand when comparing two super funds is whether the fund is a defined benefit or an ... Read more
How much super do I need to retire?
No doubt you have heard people say you need a million dollars (or some other nice round figure) in superannuation before you can afford to retire. Often they are the same people trying to sell you investment products or advice. Don’t pay attention to them, because there is no magic number. The amount of super YOU need ... Read more
Super to income Reckoner
SuperGuide’s Super to income Reckoner can help you quickly and simply understand approximately how much retirement income your super savings might be able to generate. The figures used in the reckoner have been sourced from the MoneySmart Retirement Planner, a powerful tool that we highly recommend you try for ... Read more
The rules of superannuation: Your guide for 2018/2019
When you mention super, most people shake their head and mutter about the constant rule changes. Looking back over the past few years it’s a fair comment, with many significant changes occurring – and many more proposed but never legislated. If you are wondering how those changes have affected your super and ... Read more
Income from super Reckoner
SuperGuide’s Income from super Reckoner can help you quickly and simply understand the approximate super savings you need to fund your desired retirement income. The figures used in the reckoner have been sourced from the MoneySmart Retirement Planner, a powerful tool that we highly recommend you try for yourself. ... Read more
Definitive guide to the $1.6 million transfer balance cap
One of the most significant changes to superannuation – the introduction of the $1.6 million transfer balance cap – became effective on 1 July 2017. The Australian Taxation Office (ATO) estimates the changes will impact only 1% per cent of Australian superannuants, however that 1% needs to be clearly across the ... Read more
TBAR – Transfer balance account reporting for SMSFs
From 1 July 2017 the Federal government introduced the transfer balance cap, which currently sits at $1.6 million and which will be indexed periodically in $100,000 increments. The transfer balance cap is the limit on the amount that can be used to commence a pension in retirement phase. It is the total amount that can ... Read more
Super’s rulebook: What rules apply to you at different ages?
Australia’s super system has lots of rules – many of which have significant penalties if you breach them – but not every rule applies to everybody at every age. There are different rules at different ages on how much and when you can contribute to super, when you can get your hands on your savings, and how much tax ... Read more
Super tips and strategies for all ages
Whatever your age, putting some time and effort into your super now can result in significant benefits down the track. To help get you headed in the right direction, SuperGuide has put together a list of useful tips and strategies to consider implementing in each decade. And don’t wait until just before retirement. If ... Read more
Your tax guide to accessing your super under age 60
Many people dream about retiring early, taking their super and heading off to enjoy their remaining years, but it’s important to understand the tax implications before you take the plunge. Even if you are retiring you may not be able to access your super if you are under age 60 and if you do, the tax man is sure to ... Read more
Over age 60? A simple tax guide to accessing your super benefits
When it comes to the super system, reaching age 60 triggers an important change. It means you can withdraw you super benefits and most people pay no tax on their savings. This represents a big change from the tax position if you withdraw your benefits before age 60 where tax is payable on some parts of your super ... Read more
Guide to the Low and Middle Income Tax Offset (LMITO)
LMITO (sometimes referred to as LAMITO) is an acronym for the Low and Middle Income Tax Offset that the federal government introduced as part of the 2018 Budget. It’s a temporary measure for the four financial years between 1 July 2018 and 30 June 2022. The LMITO is intended to provide tax relief for low and ... Read more
What super contributions are best for me?
Working out how best to grow your super nest egg can be confusing and selecting the right mix of concessional (before-tax) and non-concessional (after-tax) contributions makes it even tougher. Whether you make small contributions over time, add a large lump sum, or use the potential tax advantages of contributing ... Read more