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Key tax and superannuation thresholds

Taxation of superannuation member benefits

Section: 3.4

The taxation treatment of a superannuation benefit depends on whether it is paid from a taxed or untaxed source, the age of the recipient, whether the benefit is paid as a lump sum or as an income stream, and whether the benefit contains a tax-free or a taxable component.

The tax-free component is non-assessable non-exempt income and is not subject to tax.

Taxation of super lump sums - taxable component for 2016-17

Age Taxable component taxed element Max tax rate Taxable component untaxed element Max tax rate
60 and above Non-assessable non-exempt income (NANE*) 0% First $1.415 million (untaxed plan cap#)
-----------------------------------------------
Balance over $1.415 million
(untaxed plan cap#)
15%
----------------

45%

Preservation
age to 59
First $195,000 (low rate cap**)
--------------------------------------------
Balance over $195,000 (low rate cap**)
0%
----------------
15%
First $195,000 (low rate cap**)
------------------------------------------------
$195,000 (low rate cap**) to
$1.415 million (untaxed plan cap#)
-------------------------------------------------
Balance over $1.415 million (untaxed
plan cap#)
15%
--------------

30%

---------------
45%

Below preservation age Whole component 20% First $1.415 million (untaxed plan cap#)
--------------------------------------------------
Balance over $1.415 million (untaxed plan cap#)
30%
----------------
45%
 

Note: For all non-zero tax rates, Medicare levy may also apply.
Please refer to section 7.1 for more information.

*NANE income is neither assessable income nor exempt income. It is ignored when working out your client's taxable income and their tax losses.
** The 'low rate cap' is indexed annually and is rounded to the nearest $5,000.

# the 'untaxed plan cap' is indexed annually and is rounded to the nearest $5,000.

Taxation of Super Income stream benefits

Age Taxable component taxed element Taxable component untaxed element
60 and above 0%. Not assessable income, not exempt income (NANE) MTR less a 10% tax offset
Preservation age to 59 MTR less a 15% tax offset MTR (no tax offset)
Below preservation age MTR (no tax offset) MTR (no tax offset)

Note: For all non-zero tax rates, Medicare levy may also apply.

Last modified: Tuesday, May 2, 2017