Tax on superannuation - How is super taxed?

Super can be a tax-effective way to save for your retirement

To help you save for tomorrow, the Government usually takes less tax from super than from other types of investments or savings.

Super is taxed at three different stages:

When super goes into your account (contributions tax)
From investment earnings before they are added to your account, and
When you withdraw money from your account, if under age 60.

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Tax on contributions

Contributions tax of 15% is charged on before-tax (concessional) contributions. This tax is paid directly to the Australian Taxation Office (ATO). Additional tax will apply to your concessional contributions if you are a higher income earner (find more on the ATO website).

Any amounts above your concessional contributions cap are counted towards your assessable income and so will be taxed at your marginal income tax rate (less 15% tax offset).

For after-tax (non-concessional) contributions, no tax is charged when they are made to super. If, however, you exceed the non-concessional contributions cap and don’t release the excess amounts then they will be taxed at 47%.

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Tax on investment earnings

Investment earnings on your super account are taxed at up to 15%.

This tax is deducted from the crediting rate that applies to your super before the earnings are added to your account.

Because many other investments (such as property) are taxed at a higher rate, super compares well as a long-term savings option.

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Tax on withdrawals

The amount of tax on withdrawals from super can depend on your age, the amount of your payment and the reason.

If you’re under age 60, tax may be deducted from super benefit withdrawals before you receive them. If you’re aged 60 or over, withdrawals are tax free.

You can find more information in our How super is taxed (PDF).

Why we need your tax file number

You can choose not to give us your tax file number (TFN), however if you do not give us your TFN:

Your before-tax super contributions are taxed at a higher rate
Cbus Super can’t accept your after-tax or personal contributions
It may be harder to find any lost super or combine your super accounts.

Under the Superannuation Industry (Supervision) Act 1993, Cbus Super is authorised to collect your TFN, which will only be used for lawful purposes. These purposes may change in the future as a result of legislative change. Your TFN may be shared with another super provider, when your benefits are being transferred, unless you request in writing that your TFN is not shared.

How to find your other super accounts

You can give Cbus Super search consent.

If you’ve had more than one job, you may have more than one super account. This means you could be paying more in fees than you need to. By combining your super into just one account, you can save fees and reduce the hassle of managing multiple accounts.

Cbus provides a free lookup service to help you find lost, unclaimed and other super accounts.Giving your permission allows us to use your TFN to do a search on your behalf, with other super funds and the ATO.

We’ll let you know if any other super accounts are held in your name.

Contact us to supply your TFN

Can I claim a super tax deduction?

You can apply to claim a tax deduction for personal payments you make to Cbus Super. To be eligible you need to meet a number of conditions.

For example you need to:

Have made a personal contribution to super during a financial year
Meet the age-related requirements (see below).

To make a claim:

Notify Cbus Super by completing the Claim a tax deduction for personal contributions super form.
Confirm Cbus Super has acknowledged the notice including the amount you intend to claim.

The personal contributions you claim as a tax deduction are treated as before-tax (concessional) contributions, so they contribute to your before-tax contributions cap. They're also no longer eligible for a Government co-contribution.

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Satisfying the age requirements

You must be between 18 and 75
If you are aged between 67 and 75, you will need to meet the work test, or work test exemption.
If you’re 75, you need to make your personal contribution no later than 28 days after the month of your 75th birthday.
If you’re under 18 at the end of the financial year, you may still be eligible for a tax deduction if you have earned income as an employee or business operator in the same period as your claim.

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Notification deadlines

You’ll need to let us know you’re going to claim a tax deduction before:

You fully withdraw or transfer funds from your Cbus account (including commencing an income stream account). You may not be able to claim the full amount if you lodge the notice with us after making a partial withdrawal or rollover.
The day you lodge your income tax return with the ATO for the financial year in which the contribution was made
The end of the financial year following the year when contributions were made.

Complete the approved Claim a tax deduction for personal contributions to super form and return it to Cbus.

Adjusting previous lodgement

If you’ve already lodged a notice with Cbus Super and want to adjust the amount stated in the earlier notice, complete the same form. If you’ve already lodged your tax return or it’s a new financial year, you cannot adjust the amount. Once lodged, your notice cannot be withdrawn.

Fund confirmation

After validation, we’ll write to you to acknowledge your intention to claim a tax deduction.

You must receive this notice before you can claim a tax deduction. We recommend you provide this to your tax adviser or accountant, or on request by the ATO.