Tax on super pensions
Tax may be payable on investment earnings and income payments if you have money in a superannuation pension.
What tax rate is payable on investment earnings?
The table below summarises the tax rate payable on investment earnings in the fund from the two main types of pensions that can be started with super money. The tax payable on income payments received from a super pension is shown lower down on this page.
Tax payable on investment earnings
| Pension type | Tax on investment earnings |
|---|---|
| Transition to retirement pension held in pre-retirement phase, opens in new window | Up to 15% |
| Account based pension and TTR pensions that have entered retirement phase, opens in new window | 0% |
What tax rates are payable on pension payments if you start a superannuation pension?
The table below summarises the tax payable on income payments if you use your super to start a transition to retirement or account based pension. Check your latest statement or contact your super fund to confirm the tax components of your super account.
Note: Different tax rates apply to ‘capped defined benefit income streams’ – see the Australian Taxation Office for more information.
Taxation of pension payments received as a fund member
| Tax component | Age | Maximum tax rate |
|---|---|---|
| Tax-free | Any | Tax-free |
Taxable (taxed element) |
Under age 60 | Taxed at marginal tax rate, opens in new windowView disclaimer3 (15% tax offset applies if due to permanent disability) |
| Age 60+ | Tax-free |
Disclaimer3. Plus Medicare levy and Medicare levy surcharge (where applicable).
What tax rates are payable on pension payments if you receive a death benefit pension?
The table below summarises the tax payable on income payments from an account based pension you may receive in the event of the death of another person.
Note: Different tax rates apply to ‘capped defined benefit income streams’ – see the Australian Taxation Office for more information.
Taxation of pension payments received in the event of the death of a fund member
| Age of deceased/beneficiaryView discliamer4 | Tax component | Tax treatment |
|---|---|---|
| Either aged 60 or over | Tax-free | Tax-free |
| Taxable (taxed element) | Tax-free | |
| Both under age 60 | Tax-free | Tax-free |
| Taxable (taxed element) | Taxed at a marginal tax rate, opens in new windowView dislaimer5 less 15% offsetView dislaimer6 |
Disclaimer4. This tax treatment also applies to child superannuation pensions paid due to death. Pension payments are taxed at adult marginal tax rates (if applicable).
Disclaimer5. Plus Medicare levy and Medicare levy surcharge (where applicable).
Disclaimer6. Pension payments will be tax‑free once beneficiary reaches age 60.
What next?
Find out more about Super and retirement rules.
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General advice and information only
Any advice and information on this website is general only, and has been prepared without taking into account your particular circumstances and needs. Before acting on any advice on this website you should assess or seek advice on whether it is appropriate for your needs, financial situation and investment objectives.
Tax disclaimer
Any general tax information on this website is intended as a guide only and is based on our general understanding of taxation laws. It is not intended to be a substitute for specialised taxation advice or an assessment of your liabilities, obligations or claim entitlements that arise, or could arise, under taxation law, and we recommend you consult with a registered tax agent.
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