As an incentive to help you save for your retirement, super enjoys concessional rates of tax.
The government imposes limits on the amount of contributions you can make to your super each financial year, called contribution caps. Make sure you become familiar with these to avoid paying extra tax on any contributions that exceed the caps.
See what taxes may apply to you.
Don’t pay more tax than you have to!
It's important to give us your tax file number (TFN). If you don't, you could end up paying 31.5% more tax than you need to on your super contributions.
What's more, if you haven’t given us your TFN:
Giving us your TFN is easy. Simply log into MemberOnline or complete a Tax file number collection
See more on:
Tax on contributions
The table below provides an overview of tax on contributions, and assumes that you have provided your tax file number (TFN).
|Main types of contributions
|How much tax is paid
|How the tax is paid
- Superannuation Guarantee (SG) contributions and
- Salary sacrifice contributions made by your employer from your before-tax salary.
|15% on contributions up to the concessional (before-tax) contributions cap*.
||The tax is deducted from your super account.
|A further amount of
31.5% on contributions which exceed the concessional (before-tax) contributions cap.
|The excess contributions tax is paid ‘out of your pocket’ to the ATO. You may instruct UniSuper to deduct this amount from your super account to pay the tax.
|Personal after-tax contributions
Includes contributions made from your take-home pay.
Spouse contributions are treated in the same way as personal after-tax contributions – this is provided that your spouse [link to definition] does not claim it as a tax deductible employment-related contribution and provided that you are not living separately from your spouse.
Please note, personal contributions where you provide us with a valid form that states that you intend to claim a tax deduction are taxed as before-tax contributions (see above).
|Personal after-tax contributions are not taxed on amounts up to the non-concessional (personal after-tax) contributions cap.
|Any contributions which exceed the non-concessional (personal after-tax) contributions cap are taxed at a minimum of 46.5%.
|The excess contributions tax is to be paid out of a super account of yours that you nominate.
*The government has proposed to change the tax rules for contributions for individuals with income greater than $300,000. If passed by parliament, this may mean that some high income earners will have an additional 15% tax applied to their concessional contributions. The exact detail of how this will work and how it will be collected is not yet known.
Government caps on contributions
The government imposes limits, called contributions caps, on the total amount of contributions that you can make to super in each financial year and still receive concessional tax treatment on those contributions. If you exceed the caps, you may pay a much higher tax rate on any contributions that exceed the caps, or we may refuse to accept contributions in some circumstances.
Each cap applies to all contributions made by you or on your behalf in a financial year, regardless of how many employers or super funds you have. Government co-contributions are not included in either of the caps.
DBD and Accumulation 2 members usually receive a higher employer contribution rate, and are required to make additional standard member contributions. The caps apply to these contributions.
It’s your responsibility to monitor the contributions made into your UniSuper account, and to any accounts you may hold in other super funds, to ensure you don’t exceed the caps.
Caps on concessional (before-tax) contributions
Concessional (before-tax) contributions of up to $25,000 in the 2012/13 financial year will only incur the 15% contributions tax (provided we have your TFN).
If you exceed this concessional contributions cap, any excess concessional contributions will be taxed at 46.5% (which means that an additional 31.5% is levied on top of the 15% contributions tax already levied).
The concessional contributions cap will be indexed annually to average weekly ordinary time earnings, and rounded down to the nearest multiple of $5,000.
Concessional contributions include:
- made from before-tax money (i.e. before-tax contributions). They include employer contributions to an accumulation account (including any salary sacrifice contributions).
- personal member contributions made by you which you validly claim as a tax deduction.
- the taxable component of all your directed termination payments in excess of $1 million.
- notional taxed contributions to a defined benefit component.
DBD members should also read the information on notional taxed contributions. Notional taxed contributions count towards a DBD member's concessional contributions cap.
Note: The government has however passed legislation freezing the indexation of the concessional cap to $25,000 up to and including the 2013/14 financial year. Normal indexation resumes from the 2014/15 financial year.
A higher annual cap of $50,000 applies if you were aged 50 years or over during the period from 1 July 2009 to 30 June 2012.
From 1 July 2012, all individuals have a concessional contribution cap of $25,000. The government previously announced that it proposed to increase the concessional contribution cap to $50,000 for individuals who have total super balances below $500,000 and are aged 50 years or over. However this proposed change has been deferred to 1 July 2014 and has not yet been legislated.
DBD members and notional taxed contributions
Notional Taxed Contributions (NTCs) are the notional amount of contributions (excluding after-tax member contributions) that relate to your defined benefit component. NTCs are counted towards your concessional contributions cap.
Contributions made to your accumulation component are not counted in your NTCs. This means that any concessional (before-tax) contributions made to your accumulation component must be added to your NTC value when determining whether you have reached your concessional contributions cap.
Non-concessional contributions are generally contributions made into your super from personal after-tax money. They include:
Some personal contributions aren’t treated as non-concessional contributions, including certain contributions arising from settlement of legal claims or orders for personal injuries, or made from proceeds of certain capital gains tax events.
- personal contributions made from your take-home pay.
- voluntary personal contributions you don’t claim an income tax deduction for.
- most spouse contributions.
- certain amounts transferred from foreign super funds.
- excess concessional contributions.
What this means
NTC values are generally lower than the actual amount of before-tax contributions that relate to your defined benefit component. This means you may be able to top up your before-tax contributions to your accumulation component without exceeding your concessional contributions cap.
You can find out more about NTCs and how they affect you in MemberOnline. More details can also be found in the following fact sheets:
Caps on non-concessional (personal after-tax) contributions
Non-concessional (personal after-tax) contributions to your super are not taxed, up to a limit of $150,000 in the 2012/13 financial year. However, if you exceed this cap, the excess contributions will be taxed at a minimum 46.5%. The non-concessional contributions cap is six times the concessional contributions cap.
If you are under age 65 and your non-concessional contributions exceed $150,000 in a financial year, you may be able to average your contributions over a period of three years by bringing forward the next two years of contributions. Certain conditions apply. For example, you could contribute $450,000 in one financial year, but nothing in the subsequent two financial years.
Note that any excess concessional contributions also count towards your non-concessional contributions cap.
Be careful! If your contributions exceed both the concessional and non-concessional contributions caps in a financial year, the excess amount could be taxed at 93% overall.
Excess contributions tax
The Australian Taxation Office (ATO) will assess you personally for any excess contributions tax that you have incurred. If you have an excess concessional contribution tax liability you will be given a voluntary release authority from the ATO to authorise the release of money from a superannuation account of yours up to the amount of your excess concessional contributions tax liability.
If you have an excess non-concessional contributions tax liability, the ATO will send you a compulsory release authority for the amount of the tax which you must use to authorise the release of the tax amount from a super account. You must present the compulsory release authority to the Fund within 21 days in order to release money from your account to meet the tax liability. If you do not present the compulsory release authority to the Fund within that time frame you will be subject to a penalty. The voluntary and compulsory release authority is valid for 90 days from the date of the notice. If we receive a release authority after 90 days we cannot action the notice. To action a valid voluntary or compulsory release authority we must take the following steps:
- pay to you or the ATO the lesser of:
- the amount specified by you or the ATO in writing,
- the amount of the excess contributions tax stated in the release authority notice, or
- the total value of your superannuation interest in the Fund (other than a defined benefit interest)
- pay the amount within 30 days of receiving the valid release authority
- complete the release authority statement and send it to the ATO within 30 days of paying the amount, and
- send a copy of the release authority statement to you within 30 days of paying the amount.
It is important to note that if you do not give your super fund(s) a compulsory release authority within 90 days to withdraw the full amount of your excess non-concessional contributions tax liability, the ATO may contact us authorising us to release from your superannuation interest an amount equal to any excess non-concessional contributions tax you have not withdrawn.
Note: In the 2011/12 Federal Budget the government announced that, from 1 July 2011, individuals that breach the concessional contributions cap by $10,000 or less may be provided with a once-only offer by the ATO to take excess concessional contributions out of their super fund and have the amount assessed at their marginal rate of tax.
It will only apply for first-time breaches of the concessional cap and apply for contributions made in the 2011/12 financial year onwards.
Spouse contributions tax offset
Your spouse may be entitled to claim a tax offset of 18% for spouse contributions of up to $3,000 they make to your account on your behalf in a financial year.
However, this is subject to eligibility requirements and depends on the level of your assessable income and reportable fringe benefits and super contributions.
Tax of contributions where no TFN has been provided
As a Spouse Account can generally only be opened if you provide your TFN, this section generally only applies to Accumulation 1 members.
If you haven’t provided your TFN, any contributions or transfers that would attract tax when paid into UniSuper (such as SG or salary sacrifice contributions or any part of a transfer from an overseas super fund that is treated as a taxable contribution) will also attract an additional tax of 31.5% that will be deducted from those contributions (totalling 46.5%).
If you provide your TFN within the three financial years following the contribution, we may be able to claim this additional ‘No-TFN’ tax back from the ATO.
If we are able to claim the additional ‘No-TFN’ tax back, we will re-credit it to your Accumulation 1 account if you still have one.
Further, UniSuper cannot accept various types of contributions including personal after-tax contributions for you (including spouse contributions) if you have not provided your TFN.
Tax on rollovers
No tax is payable if you roll over your benefit from one super fund to another, unless the amount contains an untaxed element, for example from certain public sector super funds. An untaxed element rolled into UniSuper attracts the 15% contributions tax when it is received by the Fund.
Transferring your super from an overseas super fund
You can transfer a superannuation lump sum from an overseas super fund directly into UniSuper. Generally amounts transferred into UniSuper from an overseas super fund, excluding amounts included in the Fund’s assessable income, are treated as non-concessional (personal after-tax) contributions and will count towards your non-concessional contributions cap.
You should obtain tax advice when transferring super from an overseas super fund as the tax treatment of the amount being transferred depends on a number of factors.
For more information, please refer to the ATO website at www.ato.gov.au.
Tax on investment earnings
Investment earnings are generally taxed at up to 15%. This tax is deducted from the Fund’s investment earnings before they are allocated to your account.
Tax on withdrawals
You may have to pay tax when you withdraw your benefit from the Fund.
We will normally deduct any applicable tax before paying your benefit. The amount of tax you will pay will depend on your circumstances, such as your age and how your benefit is paid to you.
Please note that if you are under age 60 and have not provided a TFN, withholding tax at the rate of 46.5% will generally be payable on the taxable component of a benefit payment made to you.
AGE 60 OR OVER
If you are 60 or over, a benefit payment you receive will generally be tax-free regardless of whether the benefit is paid as a lump sum or as a pension.
BEFORE AGE 60
If you take your benefit before age 60, tax may apply to your benefit payment. Your benefit generally comprises a tax free and taxable component. When you make a lump sum withdrawal of your benefit, the amount you receive will be drawn down from your tax-free and taxable components in proportion to the amount of each component in your entire benefit.
If you have reached your preservation age (between 55 and 59 depending on your date of birth), you will pay tax on the taxable component of your lump sum benefit that exceeds the low rate threshold (currently $175,000 for the 2012/13 financial year). The rate of tax that generally applies for amounts in excess of this threshold is 16.5% including the Medicare Levy*. If you are under your preservation age when you take your lump sum benefit, tax will generally be levied on the entire taxable component at a rate of 21.5% including the Medicare Levy*. Different tax rules apply if you take your benefit as a pension.
The taxable component of benefits claimed by temporary residents will generally be subject to 35% withholding tax.
For more information, refer to our Departing Australian Superannuation payment fact sheet or by calling the UniSuper Helpline on 1800 331 685.
Death benefits are paid as a lump sum and are generally received tax-free if paid to a beneficiary who is your dependant for tax purposes. This includes where the benefit is paid to your legal personal representative and a dependant has benefitted or may be expected to benefit from the payment.
Tax is generally payable on the taxable component of the lump sum benefit if it is paid to a beneficiary who is not your dependant for tax purposes, at the rate of 16.5% including the Medicare Levy*. If the taxable component contains an untaxed element, the untaxed element will generally be taxed at the rate of 31.5% including the Medicare Levy*. This includes where the benefit is paid to your legal personal representative and a non-dependant for tax purposes has benefitted or may be expected to benefit from the payment. However, the Medicare Levy* is not payable by the trustee of a deceased estate. The tax-free component is not subject to tax.
There may be additional tax implications if there are insurance proceeds.
*Different rules apply for death benefits taken as an income stream
Providing your TFN
The Trustee is authorised and required to ask you for your tax file number (TFN) by tax law and in accordance with the Superannuation Industry (Supervision) Act 1993.
Your TFN will only be used for lawful purposes, which include:
- finding and amalgamating your superannuation benefits where insufficient information is available
- providing information, including your TFN, to the ATO, for example when you receive a benefit or if you are a lost member or have unclaimed benefits, and
- providing information, including your TFN, to the trustee of another superannuation fund when your benefits are being transferred, unless you advise us in writing that you do not wish your TFN to be passed on.
It is not an offence not to quote your TFN, however, providing your TFN to your superannuation fund will have the following advantages (which may not otherwise apply):
- we will generally be able to accept all types of contributions to your accounts (subject to contribution caps),
- the tax on contributions to your super accounts will generally not increase where you do not exceed the contribution caps,
- other than the tax that may ordinarily apply, no additional tax will be deducted when you start drawing down your superannuation benefits, and
- it will make it much easier to trace different superannuation accounts in your name so that you receive all your super benefits when you retire.
The lawful purposes for which your TFN can be used and the consequences of not providing us with your TFN may change in future as a result of legislative change.
We will pay an additional amount, referred to as an anti-detriment payment, in addition to the lump sum death benefit, if the death benefit is paid to certain beneficiaries of the deceased member.
These do not apply to DBD members.
The anti-detriment payment represents a reimbursement of the contributions tax that the Fund paid on the deceased member’s taxable contributions. The payment will only be made where a lump sum death benefit is paid to the spouse, former spouse or child (including an adult child) of the deceased member. The payment may also be made if a lump sum death benefit is paid to the trustee of the deceased member’s estate and the proceeds of the estate are expected to be distributed to the deceased member’s spouse, former spouse or child (including adult child).
Anti-detriment payments will not be made on any defined benefit component that makes up the death benefit.
Before you withdraw any benefits or make a substantial contribution, we recommend you seek advice from a tax specialist.