How super is taxed
Your superannuation is subject to tax at three different points:
- when you contribute;
- when your investment earns money; and
- when you withdraw your funds.
How you contribute to your superannuation fund will determine if these contributions will be taxed or not (see concessional contribution and non-concessional contributions below).
Investment earnings within your superannuation fund are generally taxed up to 15%. The tax you pay on withdrawals from your superannuation fund depends on how you withdraw it, the type of contribution made to your super fund and how old you are. You find more information about withdrawals in the Product Disclosure Statement.
There are two types of superannuation contributions:
The tax you pay on contributions depends on how and when you contribute to your super. Concessional contributions (contributions made from your before-tax income, including the superannuation guarantee contributions your employer makes, salary sacrifice, any other employer contributions and contributions claimed as a tax deduction) are generally taxed at 15%.
The concessional contributions cap for the 2023-24 financial year is $27,500 for all individuals regardless of age.
A concessional contributions cap (limit) applies to these sorts of contributions. If you exceed the cap in any financial year, the amount over the cap will be taxed at your marginal tax rate.
Non-concessional contributions (contributions made from your post-tax income) do not generally attract tax, as you have already paid tax on your income. However, a non-concessional contributions cap applies.
The non-concessional contributions cap for the 2023-24 financial year is:
- $110,000 a year; or
- $330,000 in a rolling three-year period under the bring forward provision if you are under age 75.
If you exceed the above limits, you have the choice to release the excess contributions (plus any interest) or to leave them in the Fund and you may be subject to a penalty tax of up to the highest marginal tax rate.
If your total income is less than $58,445 in the 2023-24 financial year and you make a non-concessional contribution before 30 June 2024, you may be entitled to a Super co-contribution payment.
To discuss your super contributions for this financial year, or for more details about contribution caps, speak to our Member Services Team on 1300 360 988.
You may wish to speak to a First Super Financial Planner to discuss ways to maximise superannuation contribution caps, or your plans to access your superannuation and any tax implications.