Tax & super

As an incentive to help you save for your retirement, superannuation enjoys concessional rates of taxation. Find out what taxes may apply to you.

What taxes apply to my super?

To encourage you to save for retirement, the government offers a number of tax incentives for your super. The following taxes may apply, depending on your personal circumstances.

Contributions tax

A contributions tax is applied to:

• all employer contributions
• any before-tax (salary sacrifice) contributions you make, and
• any amount you roll into UniSuper from an untaxed source such as rollovers from a public sector super fund.

The current contributions tax rate is 15%.

Tax on your investment earnings

Investment earnings are taxed at up to 15%.

In some cases this rate may be less as a result of any tax deductions for which the Fund may qualify. This tax is deducted from the Fund’s investment returns before they are allocated to your accumulation component/account. 

Tax when you withdraw your super

You may have to pay tax when you withdraw your benefit from the Fund. UniSuper will normally deduct any tax before paying your benefit.

• If you are aged 60 or over you will not pay tax when you withdraw your super, regardless of whether your benefit is paid as a lump sum or pension.
• If you are aged under 60 tax may apply to your benefit payment. Your benefit will be divided into two components:
  • A tax-free component, and
  • A taxable component.

The taxable component will be taxed in the following way:

Limits on your contributions

The government has set limits on the amount you can contribute to your super each year at a reduced tax rate. If your contributions exceed these limits, you may have to pay extra tax on the excess contributions.

Before-tax (concessional) contributions

If you are under 50 years of age, you'll only be taxed at 15% for the first $25,000 of before-tax contributions to your super fund each financial year. This includes both salary sacrifice contributions as well as compulsory employer contributions.

Any before-tax contributions received above this $25,000 cap will be taxed at the highest marginal rate of 46.5% including the Medicare levy.

A higher annual cap of $50,000 applies if you are aged 50 years or over during the period from 1 July 2007 to 30 June 2012. If you turn 50 during this period you can also access the higher cap for the years up until 30 June 2012.

If you're a Defined Benefit Division member, Notional Taxed Contribution (NTC) rates apply. Refer to the NTC rates for DBD members fact sheet for more information.

After-tax (non-concessional) contributions

Any after-tax contributions that you make to your super cannot exceed $150,000 in the 2010/11 financial year.

Up to this threshold, these contributions are not taxed when they are received in the Fund. However, if you exceed this limit (called the non-concessional contributions cap), the excess contributions will be taxed at 46.5%.

If you are under age 65, the non-concessional cap can be averaged over a period of three years, which means you can choose to contribute up to $450,000 in after-tax contributions over a three-year period. For example, you could contribute $450,000 in one financial year, but nothing in the subsequent two financial years.

Tax on rollovers

If you roll your UniSuper benefit into another super fund no tax is payable.

An untaxed element rolled into UniSuper attracts 15% contributions tax when it is received by the Fund.

Providing your tax file number

It's important to give UniSuper your tax file number (TFN). If you don't, you could end up paying more tax than you need to on your employer's super contributions. And, over time, this could make a big difference to your retirement savings.

It's easy to provide your TFN.

Just login to MemberOnline or complete a Tax file number collection form.