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 concessional tax 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
The government has set contributions caps (limits) on the amount you can contribute in a financial year. Different caps apply to before-tax (concessional) and after-tax (non-concessional) contributions. Higher taxes apply to contributions made over the relevant contribution caps, as detailed in the table below.
Tax rates and contribution limits for 2024-25 financial year
| Before Tax (Concessional) | After Tax (Non-Concessional) | |
|---|---|---|
| Types of contributions included | Employer contributions Salary sacrifice Personal | Personal Spouse Government co-contribution1 |
Contribution Cap | $30,000 per year | $120,000 per year |
Tax on contributions up to the cap | 15% | Nil |
| Tax on excess amounts breaching the cap | If you exceed your concessional contributions cap, the excess concessional contributions (ECC) are included in your assessable income and tax at your marginal tax rate (less 15% tax offset) You can withdraw up to 85% of the excess concessional contributions (ECC) from your super fund to pay your income tax liability. | If you elect to leave the excess non-concessional contributions (ENCC) in your super fund, tax rate of 47%2 applies. The ATO will send an ENCC tax assessment. You have the option to withdraw from your Media Super account any excess non-concessional contributions made and 85% of associated earnings. |
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
Investment earnings within super are taxed at a maximum rate of 15%. The actual rate may be lower due to certain tax credits and tax offsets available to Media Super.
Any tax is deducted from the crediting rate that applies to your super before earnings are added to your account.
Withdrawing your super
Your super benefit is divided into two components – tax-free and taxable. While no tax is deducted from your tax-free component, the tax that applies to your taxable component will depend on the circumstances. The maximum rate of tax that will apply to your taxable component is outlined below.
Tax payable on lump sum withdrawals
| Benefit Type | Tax if you’re under 60 |
| Lump sum withdrawals after age 60 | 0% |
| Lump sum withdrawals before age 60 | 22% (including 2% Medicare Levy) |
| Terminal illness | 0% |
| Departing Australia Superannuation Payment (DASP) | 65% for working holiday makers, or 35% |
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.
Tax payable on income stream
| Component of super benefit | Below Preservation age | Age 60 and over |
|---|---|---|
| Tax-free | Nil | Nil |
| Taxable | Your marginal tax rate with a tax offset of 15% | Nil |
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 on death benefits
Lump sum death benefits
The tax payable on death benefits will depend on who is receiving the benefit, and whether they are considered a dependant for tax purposes. Different rates of tax apply to the taxed and untaxed elements of a death benefit.
| Maximum tax rate – Taxed element | Maximum tax rate – Untaxed element |
| 0% if paid to a tax dependant, or 17% (including 2% Medicare Levy) if paid directly to a non-tax dependant. | 0% if paid to a tax dependant, or 32% (including 2% Medicare Levy) if paid directly to a non-tax dependant. |
Lump sum payments made to an estate
We don’t withhold tax from death benefits we pay to an estate. The executor of the estate is responsible for deducting tax once a decision has been made on the beneficiaries of the estate.
The tax rates are the same as those maximum tax rates shown above, but without the 2% Medicare Levy.
Death benefits paid as an income stream
Only dependants for tax purposes can elect to take a death benefit entitlement as an income stream. The tax that applies to income stream payments will depend on both the age of the deceased and the age of the person who is receiving the benefit. Note that death benefit income streams count towards the recipient’s personal transfer balance cap.
| Age of deceased and recipient | Tax treatment –Taxed element | Tax treatment – Untaxed element |
| Either aged 60 or over | 0% (tax-free) | Taxed at marginal income tax rates (plus Medicare Levy), less 10% pension tax offset |
| Both aged under 60 | Taxed at marginal income tax rates (plus Medicare Levy), less 15% pension tax offset | Taxed at marginal income tax rates (plus Medicare Levy) with no tax offset |
Additional tax offsets
Personal deductions
Personal contributions for which you’ve claimed a tax deduction
If you’ve made a personal (after-tax) contribution to your super and notify us that you intend to claim a tax deduction for it, we’ll deduct 15% tax on the amount you’re claiming as a deduction.
Any amount you claim a tax deduction for will be considered a concessional contribution and will count towards both your concessional contributions cap, and the Division 293 income threshold. Additional tax applies if you exceed these contributions thresholds.
Read the information on our How to claim a tax deduction on personal contributions for super fact sheet (PDF) available from mediasuper.com.au/forms or visit ato.gov.au for more information about eligibility and claiming a tax deduction.
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.
If you've got questions, we've got answers
We understand managing your super can seem complex, we are ready to take your call with any questions you may have.