The Federal Government’s super reforms have cleared Parliament. Some of the changes may affect you, so read our overview for more information. Before making any considerable changes to your super or pension as a result of the changes, we encourage you to speak with a qualified UniSuper financial adviser.
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 34% 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
|Concessional (before-tax) contributions
are contributions made from your before tax income.
Concessional contributions include:
- Superannuation guarantee employer contributions;
- Salary sacrifice contributions made by your employer from your before-tax salary; and
- Personal contributions where you provide us with a valid form that states your intention to claim a tax deduction.
|15% on contributions up to the concessional (before-tax) contributions cap.*
||The tax is deducted from your super account.
Contributions which exceed the concessional (before-tax) contributions cap are included in your assessable income and taxed at your marginal tax rate.
An excess concessional contribution charge will also apply.
You will also be entitled to a 15% non-refundable tax offset on the excess concessional contribution (because you have already paid tax on this money).
You can choose to release up to 85% of your excess concessional contributions from your super account. Excess concessional contribution released from your super account will not be counted towards your non-concessional contributions cap.
Any excess concessional contributions not released will be counted towards your non-concessional (after tax) contributions cap.
The ATO will provide you with an assessment. The tax is paid ‘out of your pocket’ to the ATO.
You can release up to 85% of the excess concessional contributions from your superannuation account.
Non-concessional (after-tax) contributions
include contributions made from your take-home pay.
Non-concessional contributions include:
- Personal contributions that are not claimed as a tax deduction;
- Contributions your spouse makes on your behalf are treated in the same way as after-tax contributions, provided your spouse does not claim the contribution as a tax-deductable employer contribution and provided that you are not living separately from your spouse; and
- Concessional contributions that exceed your concessional contributions cap, and where you do not choose to release the excess from your super account.
|There is no tax payable on non-concessional (after-tax) made up to your non-concessional (after-tax) contributions cap.
If you exceed your non-concessional (after-tax) contributions cap, you may choose to withdraw the super contributions in excess of your non-concessional contributions cap plus 85% of any associated earnings.
The associated earnings withdrawn are taxed at your marginal tax rate. You will also be entitled to a 15% non-refundable tax offset of the associated earnings included in your assessable income.
If you choose not to withdraw your excess non-concessional contributions they will remain in your super account and the excess will be taxed at 49%.
|The ATO will provide you with an assessment. The tax is paid on the associated earnings ‘out of your pocket’ to the ATO.
The ATO will provide you with an assessment. The excess contributions tax is paid out of your super account.
* The tax concession is reduced for concessional contributions made to super by or on behalf of individuals with income and relevant concessional contributions over $300,000 for an income year. An additional 15% tax called the ‘Division 293 tax’ on certain superannuation contributions will apply to concessional contributions made by affected members. Refer to the section headed ‘Reduction of the Contributions Tax Concession for Very High Income Earners’ in the How super is taxed booklet for information on the additional tax imposed on non excessive concessional contributions of certain high income earners.
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
Under current law, for members aged below 49 on 30 June 2015, concessional (before-tax) contributions of up to $30,000 in the 2015/16 financial year will only incur the 15% contributions tax (provided we have your TFN).
The concessional contributions cap is indexed annually to average weekly ordinary time earnings, and rounded down to the nearest multiple of $5,000.
For members aged 49 years or over on 30 June of the previous financial year the concessional contribution cap will be temporarily increased to $35,000.
Concessional contributions include:
- Contributions made from before tax money (i.e. before tax contributions) including employer contributions to an accumulation account and any salary sacrifice contributions.
- Personal contributions made by you from your after-tax money for which you validly claim a tax deduction.
- Notional taxed contributions to a defined benefit component.
DBD members should also read the information on notional taxed contributions.
If you exceed your concessional contributions cap, those excess concessional contributions will be included in your assessable income and will be taxed at your marginal tax rate in your personal income tax return.
In addition, you may also be liable to pay a charge on the increase in your tax liability that arises as a result of having excess concessional contributions for the relevant financial year. The charge begins to apply on the first day of the financial year that your excess concessional contributions are attributable. It ceases to apply on the day prior to the date a payment is due under your first personal income tax notice of assessment for the year.
If applicable, this charge is subject to a shortfall interest charge and general interest charge in the same way as the income tax liability to which the charge relates. That interest charge is based on the 90-day bank accepted bill rate (as published by the RBA) plus a 3% uplift factor, calculated and compounded daily.
You will be entitled to an offset equal to 15% of your excess concessional contributions. The offset is not refundable.
Reduction of the contribution tax concession for very high income earners
An additional tax is charged on concessional contributions made by, or on behalf of, very high income earners. This additional tax is referred to as the Division 293 tax.
The Division 293 tax is an additional rate of 15% on individuals whose income and relevant concessionally taxed superannuation contributions (referred to as low tax contributions) is more than $300,000 a year.
Income for Division 293 tax purposes includes taxable income, reportable fringe benefits, reportable superannuation contributions and total net investment losses. A member’s low tax contributions include employer and member (before tax) contributions and notional employer contributions for defined benefit members.
A member’s low tax contributions do not include non-concessional contributions and concessional contributions that are subject to excess concessional contributions tax or refunded excess contributions that are disregarded by the Commissioner of Taxation for the purposes of excess contributions tax.
If applicable to a member, the Division 293 tax is applied to the lower of:
- The member’s low tax contributions; and
- The sum of the member’s income for surcharge purposes (less reportable superannuation contributions) and low tax contributions above the $300,000 threshold.
Former temporary residents who receive a Departing Australia Superannuation Payment are entitled to a refund of any Division 293 tax paid.
You can visit the ATO's website for more information about the Division 293 tax and its assessment process.
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.
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:
Return of excess concessional contributions
Accumulation 1, Accumulation 2 and Spouse Account members who make concessional contributions in excess of the cap can make an irrevocable election to have up to 85% of their excess concessional contributions for a financial year released from their superannuation account. An amount released as a result of such an election is not assessable income or exempt income of that individual.
Caps on non-concessional (personal after-tax) contributions
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.
Non-concessional (personal after-tax) contributions to your super are not taxed, up to a limit of $180,000 in the 2015/16 financial year. The non-concessional contributions cap is six times the concessional contributions cap. If you exceed this cap, the excess contributions will be taxed at a minimum 49%.
However, for non-concessional contributions made from 1 July 2013, you won’t need to pay excess contributions tax if you request the release of the excess non-concessional contributions from your super account.
See our frequently asked questions for information on how excess non-concessional contributions are taxed from 2014/15 onwards.
If you are under age 65 and your non-concessional contributions exceed $180,000 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 $540,000 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.
Your non-concessional contributions are reduced by 85% of the amount of any excess concessional contributions released from your super.
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 up to 95% overall unless you request to release the excess contributions from your super account.
PAYMENT OF TAX ON EXCESS CONTRIBUTIONS
The Australian Taxation Office (ATO) will assess you personally for any excess non-concessional contributions tax that you have incurred. However, you won’t need to pay excess contributions tax if you choose to release the excess contributions from your super account.
See our frequently asked questions for information on how excess concessional and non-concessional contributions are taxed.
If you have an excess concessional contribution tax liability, that amount will be included in your personal income tax assessment by the ATO. If you’re an Accumulation 1, Accumulation 2, Spouse Account or Flexi Pension member, you may choose to release up to 85% of your excess concessional contributions for that financial year or all your excess non-concessional contributions for that financial year, from your super.
You can use this form to authorise the release of the tax amount from a superannuation account. To do so, you must return the appropriately completed release authority to the ATO within 21 days. The ATO is then responsible for providing that release authority to UniSuper.
Within seven days of receiving the release authority from the ATO, we will pay to you the lesser of:
- The amount specified in the release authority, and
- The total of the amounts that can be released from your superannuation account.
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, Accumulation 2 and Defined Benefit Division 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 34% that will be deducted from those contributions (totalling 49%).
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 49% 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 if it is paid as a lump sum.
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, you will pay tax on the taxable component of your lump sum benefit that exceeds the low rate threshold (currently $195,000 for the 2015/16 financial year). The rate of tax that generally applies for amounts in excess of this threshold is 17% 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 22% including the Medicare levy.
This assumes that no part of your benefit contains an untaxed element. If any part of your benefit contains an untaxed element, additional taxation would apply.
The taxable component of benefits claimed by temporary residents will generally be subject to 38% 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 17% including the Medicare levy.
If the taxable component contains an untaxed element, the untaxed element will generally be taxed at the rate of 32% 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.
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 combining 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,
- verifying you are the person to whom the super entitlements belong prior to transferring your benefit to another super fund, unless you do not provide consent for your TFN to be used for this purpose, 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.