How super is taxed

This page will help you understand the rates of tax payable within super and why it's important to provide us with your TFN.

Understanding the tax rules within super is important and can help you maximise your super savings. Contributions you receive from your employer and the contributions you make are taxed at a reduced rate.

You can be charged tax on contributions, investment earnings or when you withdraw your super.

There are also tax offsets available to members who are self-employed or who make personal contributions for their spouse.

Tax file numbers

It’s important we have your Tax File Number (TFN) so you can take advantage of the reduced tax rates within super (generally 15%).

If we don't have your TFN, any contribution your employer makes or any before-tax contributions you make (such as salary sacrifice) will be taxed at the highest marginal tax rate plus Medicare Levy, which is currently 47%. That is likely to make a big difference to your retirement savings over time.

If you are taxed at the higher rate, you may be able to apply for a refund if you provide us with your TFN. This is calculated within the three financial years following the financial year that the higher tax was paid.

Without your TFN:

• You won't be able to take advantage of any government contributions which can help boost your super
• You won’t be able to make after tax contributions
• We won’t be able to look for any lost super you may have as your TFN helps to identify you between different super funds.

If we don't already have your TFN, you can provide it by:

• Logging in to your online account
• Contact us
• Completing a Tax file number collection form and mailing it to us.

Contributions

Taxes apply to both your before-tax (concessional) and after-tax (non-concessional) contributions. The government has set contributions caps (limits) on the amount you can contribute in a financial year. This applies to both types of contributions. Higher taxes apply to contributions made over the relevant contribution caps, as detailed in the table below.

Tax rates and contribution limits for 2023-24 financial year

1. Government co-contributions are not counted towards your non-concessional contributions cap.

2. Including the Medicare Levy.

Note: The contribution caps apply to all contributions made by you, or on your behalf, in the financial year to all of your super funds. As Media Super will not be aware of your contributions to other super funds, it is up to you to monitor the total amount of contributions made by you or on your behalf in any financial year.

What if I go over the caps?

The ATO will send an assessment notice advising you of the additional tax and how to pay it. They will also notify you whether you’re eligible to apply for a refund of your excess contributions.

Investment Earnings

Your investment earnings are taxed up to a maximum of 15%.

This tax isn't charged as a direct fee but has already been deducted from your reported investment returns.

Withdrawing your super

When you withdraw your super, a tax may apply to the payment you receive. The amount of tax depends on your age and the condition of release under which you can access your super.

Your super balance is made up of two components – the taxable component and the tax-free component. The amount of tax applied to the taxable component of your payment depends on your age, as shown in the tables below.

Tax payable on lump sum withdrawals

*Applicable for the 2023-2024 financial year and indexed annually

Media Super will deduct the appropriate amount of tax from the payment you receive and pay it to the ATO. Higher tax rates may apply if you haven’t provided us with your TFN.

Different tax rates apply to income from a Media Super pension.

Permanent incapacity payments

If you are under 60 and a permanent incapacity benefit is payable (which may include a Total and Permanent Disability [TPD] benefit paid by the Insurer), part of the normal taxable component of your benefit may be recalculated to form part of the tax-free component.

Generally, the tax-free component is increased to reflect the period where you could have expected to be gainfully employed if the disability had not occurred. This amount is calculated on the basis of your age, length of service and the amount of your benefit.

You can access your benefit as a lump-sum withdrawal or you may choose to open a Media Super pension.

If you choose a lump sum, the above tax treatment applies; if you choose to receive an income stream payment, the following tax will apply

Tax payable on income stream

For a concessional tax adjustment to apply, the following conditions must be satisfied:

• Payment is made because you stopped being gainfully employed
• You stopped being gainfully employed because you suffered from ill health (whether physical or mental)
• Your gainful employment stopped before your last retirement day – generally before age 65
• Two medical practitioners certify it’s unlikely you can ever be gainfully employed in a capacity for which you’re reasonably qualified by education, training or experience.

Tax and your beneficiaries

Upon dying, the death benefit paid to your beneficiary (or beneficiaries) may consist of your super balance and payout from your insurance cover (if any). The tax applied depends on your age, your beneficiary's age and whether they're a dependant.

If you're departing Australia, find out if you're eligible to withdraw your super.

Additional tax offsets

Spouse offset

If you are married or in a defacto relationship (including same-sex couples) and make contributions on behalf of your spouse, you may be eligible for a tax offset of up to $540.

The spouse making the contribution may receive an 18% tax offset on after-tax contributions (up to $3,000 per year) if the receiving spouse’s annual income is less than $37,000. A partial rebate applies if the receiving spouse earns between $37,000 and $40,000 per year.

Eligibility conditions apply. Please read the relevant product disclosure statement and related materials for more information.