The tax you pay on your super contributions generally depends on whether the contributions were made before or after you paid income tax, you exceed the super contributions cap or you are a very high-income earner.
Before-tax super contributions
The super contributions you make before tax (concessional) are taxed at 15%.
Types of before-tax contributions include:
- Employer contributions, such as compulsory employer contributions and salary sacrifice payments made to your super funs
- Contributions that you are allowed as an income tax deduction, such as certain Contributions you make if you are self-employed
- Notional taxed contributions if you are a member of a defined benefit fund.
After-tax super contributions
The super contributions you make after tax (non-concessional) are not subject to tax.
Types of after-tax contributions include:
- Contributions you or your employer make from your after-tax income
- Contributions your spouse makes to your super fund
- Personal contributions that are not claimed as an income tax deduction
Excess contributions tax
There are limits on the amount of before-tax and after-tax contributions you can make each year, and these vary depending on your age.
If you contribute too much to your super, you may have to pay extra tax.
If you exceed the before-tax (concessional) super contributions cap, the excess is included in your income tax return and taxed at your marginal tax rate. You can choose to withdraw some of the excess contributions to pay the additional tax.
If you exceed the after-tax (non-concessional) super contributions cap, you can choose to withdraw the excess contributions and any earnings. The earnings are then included in your income tax assessment and taxed at your marginal rate.
If you don’t withdraw the earnings, the excess is taxed at 47%.
Division 293 tax for very high-income earners
Division 293 tax is an additional tax on super contributions if your combined income and super contributions are more than $300,000 a year.
Division 293 tax is 15% of your taxable concessional contributions above the $300,000 threshold.
If you are a member of a defined benefit fund, Division 293 tax may be calculated on notional contributions which are not capped.