When will tax be deducted from my account?


Superhero Team

May 26th 2021 3 minute read

Tax is deducted on super contributions, investment earnings (such as dividends), and withdrawals.

Types of contributions:

  1. Concessional contribution (examples: employer contributions, salary sacrifice) – 15% contribution tax deducted at the time of contribution provided you have supplied your TFN. If you are considered to be a high-income earner, that is your income is more than $250,000 for the financial year, you may pay additional tax on your contributions, referred to as Division 293 tax. If this applies to you, the ATO will notify you after the end of the financial year. 
  2. Non-concessional contributions (NCCs)  (example: paid by you using after-tax money). No tax is payable for NCCs below the NCC cap. NCCs form part of the tax free amount in your super. No tax is deducted on withdrawal. However, if you claim a tax deduction for personal contributions you make to your super account then your personal contributions will count towards your concessional contributions. 
  3. Spouse Contribution – If you contribute on behalf of a low income or non-working spouse, you may be able to claim a tax offset of up to $540 per year, which is 18% for contributions up to $3,000. The $3,000 contribution limit reduces by $1 for each $1 that your spouse’s assessable annual income (plus reportable fringe benefits and reportable employer super contributions) exceeds $37,000. There is no offset available where your spouse’s assessable income (plus reportable fringe benefits and reportable employer super contributions) exceeds $40,000. Other eligibility criteria apply. For more information go to www.ato.gov.au. 

Types of investment earnings:

  1. Dividends – 15% income tax deducted annually or on withdrawal
  2. Capital gains – Some capital gains may be taxed at a concessional rate of 10% on withdrawal

Lump sum payments made to you:

  1. Under preservation age – whole taxable amount is taxed at maximum of 20% (excluding Medicare)
  2. Between preservation age and under 60 – No tax on taxable amount up to the low rate cap (currently $215,000. Taxable amounts over the low rate cap are taxed at a maximum of 15% (excluding Medicare)
  3. Age 60 and over – No tax is payable
  4. Terminal illness benefit – No tax payable if eligibility criteria is met