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Taxation of superannuation

Super lump tax (member benefits)

Section: 11.2

11.2 Super lump tax (member benefits)

The table below outlines the taxation treatment of taxed and untaxed amounts paid from a superannuation fund:

Taxed in the fund:

2023/2024 Low rate cap: $235,000,  Untaxed plan cap: $1,705,000

Age Lump sum Income stream
Age 60 and over
  • Tax-free (NANE)
 Tax-free (NANE)*
Preservation age to age 59
  • 0% up to the low rate cap 
  • 15% above the low rate cap up to the untaxed plan cap 
 Marginal tax rates and tax offset of 15% of the taxable component
Below preservation age
  • Subject to tax up to the maximum rate of 20% plus Medicare
 Marginal tax rates (no tax offset)

*(NANE) non-assessable non-exempt

Untaxed in the fund:

Age Lump sum Income stream
Age 60 and over
  • Subject to tax up to a maximum of 15% on the amount up to the untaxed plan cap.
 Marginal tax rates and tax offset of 10% of element untaxed in the fund.
Preservation age to age 59
  • Subject to tax up to a maximum of 15% plus Medicare levy on amounts up to the low-rate cap.
  • Amount exceeding the low-rate cap and up to the untaxed plan cap amount is taxed at the maximum rate of 30% plus Medicare.
  • Taxed at the top marginal tax rate above the untaxed plan cap amount. 
 Marginal tax rates and no tax offset
Below preservation age Amount up to the untaxed plan cap is taxed at a maximum rate of 30% plus Medicare.

Amount exceeding the untaxed plan cap amount is taxed at the top marginal tax rate.

 Marginal tax rates and no tax offset

This technical resource is intended for the use of financial advisers only. It is current as at the date of publication but may be subject to change. This publication has been prepared without taking into account a potential investor's objectives, financial situation, needs or objectives. Before making a recommendation based on this material, you should consider its appropriateness based on the client's objectives, financial situation and needs. Rainmaker Group is not a registered tax agent under the Tax Agent Services Act 2009. Your client should refer to a registered tax agent before relying on information published herein that may impact their tax obligations, liabilities or entitlements.

Last modified: Wednesday, June 28, 2023