Most concessional super contributions and standard fund earnings are taxed at 15%. High earners pay extra through Division 293, and from 1 July 2026 very large balances lose part of that 15% concession under new large balance thresholds. Withdrawals are usually tax-free once you turn 60, though a $260,000 low-rate cap applies to lump sums taken between preservation age and 60.
TL;DR:
- Exceeding the concessional contributions cap of $32,500 results in taxed excess amounts at your marginal rate, with interest charges, and Division 293 applies above a combined income of $250,000.
- Earnings inside super funds are taxed up to 15%, but for balances above $3 million or $10 million, different thresholds may trigger higher taxes on super earnings starting July 2026.
- Tax-free withdrawals are guaranteed for those over 60, while individuals aged 59 or below can access up to $260,000 tax-free if under the low-rate cap; amounts exceeding the cap are taxed at up to 17%.
- Super Guarantee contributions are set at 12% for 2026–27, with employer contributions calculated on earnings up to a specified maximum base limit.
- State-level taxes do not affect super contribution or earnings taxes, but property and payroll taxes may impact SMSF holdings and business-related contributions.
Table of Contents
- What are the current superannuation tax rates?
- How are super contributions taxed?
- How is investment income in super taxed?
- When is money withdrawn from super tax-free?
- What is the super guarantee rate for employers?
- What should you check before 30 June?
- How are death benefits from super taxed?
- Are there tax offsets for super contributions?
- Does super tax affect other government benefits?
- Do state taxes affect superannuation?
- Amber Wealth perspective: guiding clients through super tax changes
- Get tailored superannuation tax advice
- Where to check the official figures
What are the current superannuation tax rates?
Here's the quick reference version of the numbers that matter most this financial year.
| Item | Rate or threshold (2026–27) |
|---|---|
| Standard tax on concessional contributions | 15% |
| Concessional contributions cap | $32,500 |
| Division 293 threshold (extra 15% applies above this) | $250,000 combined income + concessional contributions |
| Tax on fund earnings (standard) | Up to 15% |
| Large super balance threshold (LSBT) | the super balance amount above which additional tax concessions apply |
| Very large super balance threshold (VLSBT) | the higher threshold for further tax on super earnings |
| Low-rate cap for lump sums (preservation age to 59) | $260,000 |
| Super Guarantee (SG) rate | 12% |
Exceed the concessional contributions cap and the excess gets added to your assessable income and taxed at your marginal rate, with an interest charge on top. Non-concessional contributions have their own cap, and breaching it triggers a separate tax outcome depending on whether you withdraw the excess or leave it in the fund. Division 293 catches high earners specifically, adding another 15% on top of the standard rate once combined income and concessional contributions cross $250,000.
How are super contributions taxed?
Concessional contributions cover employer Super Guarantee payments, salary sacrifice, and personal contributions you claim as a tax deduction. They go into your fund from pre-tax dollars and get taxed at 15% on the way in. Non-concessional contributions are the opposite: money you've already paid tax on, contributed with no further tax at entry, up to your annual cap.
The concessional cap sits at $32,500 for 2026–27. Go over the cap and the excess is subject to taxation at your marginal rate, in addition to the standard contributions tax inside the fund. Division 293 works differently: if your income plus concessional contributions exceeds $250,000, the ATO applies an extra 15% specifically to the portion of contributions above that threshold.
A few things worth understanding before you contribute:
- Employer SG and salary sacrifice count toward your concessional cap automatically.
- Personal deductible contributions only count once you've claimed the deduction.
- Unused concessional cap amounts can sometimes be carried forward from previous years if your balance is under $500,000.
- Low-income earners may qualify for the Low Income Superannuation Tax Offset (LISTO), which refunds contributions tax up to $500 for those earning under $37,000.
Pro Tip: If you're claiming a personal contribution as a tax deduction, you must lodge a valid Notice of Intent to Claim a Deduction with your fund and get it acknowledged before you lodge your tax return. Miss that step and the deduction can be permanently lost, even if the money is sitting in your account.
How is investment income in super taxed?
Earnings inside your super fund, whether from shares, property, or interest, are taxed at up to 15% in accumulation phase.
That advantage now tapers off at the top end. From 1 July 2026, the better-targeted superannuation concessions measure introduces two thresholds:
- The Large Super Balance Threshold (LSBT) is $3 million for 2026–27.
- The Very Large Super Balance Threshold (VLSBT) is $10 million for 2026–27.
This mainly affects people with substantial SMSF holdings, business owners who've built super through the years, and anyone nearing retirement with a balance well above the median. If that's you, keeping an eye on your total super balance each year matters more than it used to, because crossing $3 million even briefly can change your tax outcome for that period.
SMSF trustees face a separate trap: non-arm's-length income (NALI).
When is money withdrawn from super tax-free?
Age is the single biggest factor determining how much tax you pay on a super withdrawal. Once you turn 60, withdrawals from a taxed fund are generally tax-free, whether taken as a lump sum or an income stream. Between preservation age and 59, it's more complicated, because you're dealing with taxed and untaxed components and a capped concession.
- If you're 60 or over, lump sums and pension payments from a taxed super fund are usually tax-free.
- Between preservation age and 59, the low-rate cap for 2026–27 is $260,000. Taxable component amounts up to this cap are tax-free; anything above it is taxed at up to 17% (including the Medicare levy).
- Untaxed elements, more common in older defined-benefit or public-sector schemes, carry their own cap and are taxed differently again, often at a higher rate above that threshold.
- Withholding rates depend on your age and the component type, and they jump significantly if you haven't quoted your TFN to the fund.
| Scenario | Tax treatment |
|---|---|
| Age 60+, lump sum from taxed fund | Tax-free |
| Preservation age to 59, taxable component up to $260,000 | Tax-free |
| Preservation age to 59, taxable component above $260,000 | Taxed at up to 17% |
| No TFN quoted | Higher withholding rate applies |
Say you're 58 and withdraw a $300,000 lump sum, all taxable component.
What is the super guarantee rate for employers?
The Super Guarantee rate reached 12% for the 2026–27 financial year, the final step in a series of staged increases from 9.5% over the past several years. Employers calculate SG using your ordinary time earnings, capped by the maximum contribution base, so income above that base doesn't attract compulsory SG on the excess.
- SG is 12% of ordinary time earnings for 2026–27.
- The maximum contribution base limits how much SG applies to very high earners' pay.
- Payday Super changes are shifting the timing of SG payments closer to each pay cycle rather than quarterly, which affects when contributions actually hit your concessional cap.
What should you check before 30 June?
- Check your total super balance against the $3 million LSBT and $10 million VLSBT thresholds if your balance is substantial.
- Confirm how much concessional cap room you have left, including any unused carry-forward amounts from prior years.
- Lodge your Notice of Intent to Claim a Deduction before you file your tax return, not after.
- Consider spouse contributions or contribution splitting if one partner has a much lower balance.
- Review SMSF related-party transactions for NALI exposure before the fund's earnings are assessed.
When you do speak with an adviser, bring recent super statements, your latest income summary, and details of any contributions already made this financial year.
Pro Tip: Timing matters as much as the amount. A deductible contribution made in June with no acknowledged Notice of Intent lodged before you file your return can cost you the deduction entirely, and indexed caps reset each 1 July, so contributions made a week apart across the financial year boundary can land in different cap years.
How are death benefits from super taxed?
Superannuation death benefits are taxed differently depending on who receives them and how. Paid to a dependant, whether a spouse, a child under 18, or someone financially dependent on the deceased, the benefit is generally tax-free, whether taken as a lump sum or an income stream.
Paid to a non-dependant, such as an adult independent child, the tax treatment changes. Non-dependants generally can't receive a death benefit as an income stream at all; it must come out as a lump sum.
Binding death benefit nominations matter here, because they determine who the trustee must pay, but they don't override the tax rules based on dependency status. A nomination naming an adult child as beneficiary doesn't make that payment tax-free just because it's binding. This is one of the more overlooked areas of estate planning, because people often assume super passes like other assets under a will, when in reality most super falls outside the estate unless specifically directed there. Getting the nomination and the tax outcome to align with your actual wishes is where proper estate planning advice earns its keep, particularly for blended families or adult children not currently financially dependent on a parent.
Are there tax offsets for super contributions?
Several offsets can reduce the tax cost of contributing to super, and most go unclaimed simply because people don't know they exist.
The spouse contributions tax offset gives a contributing spouse up to $540 in tax offset when they make contributions on behalf of a lower-income or non-working spouse, provided the receiving spouse's income sits under a set threshold.
Personal deductible contributions function as a tax offset in practical terms too, even though technically they're a deduction rather than an offset. None of these offsets apply automatically. LISTO is calculated by the ATO once your return and fund reporting are matched, but the spouse offset and personal deduction both require you to actively claim them and, in the deduction's case, lodge the right paperwork with your fund first.
Does super tax affect other government benefits?
Superannuation and the tax system don't operate in isolation from Centrelink and other government support, and the interaction catches people out more often than the core contribution rules do.
Money held in accumulation phase super is generally excluded from Centrelink's assets and income tests until you reach Age Pension age, at which point it counts. Once you're pension age and drawing an income stream, both the account balance (under the assets test) and the deemed income from it (under the income test) can reduce your Age Pension entitlement. This is why the timing of contributions and drawdowns matters so much heading into retirement, contributing more before pension age keeps money outside the tests for longer, while drawing down non-super assets first can sometimes preserve pension eligibility.
There's also an interaction with the Medicare levy surcharge. Reportable super contributions, including salary sacrifice, count toward the income test used to determine whether you pay the surcharge, so increasing concessional contributions can occasionally push someone's assessable income calculation in a direction they didn't expect. Family Tax Benefit and Child Care Subsidy income tests work similarly, using an income definition that adds back reportable super contributions rather than ignoring them. This is exactly the kind of interaction where Age Pension strategy advice pays for itself.
Do state taxes affect superannuation?
Superannuation tax is set entirely at the federal level under the Income Tax Assessment Act and administered by the ATO, so there's no state or territory tax specifically on contributions, earnings, or withdrawals from your super fund. Whether you live in Victoria, New South Wales, South Australia, or Tasmania, the contributions tax, Division 293 threshold, and withdrawal rules apply identically.
Where state and territory rules do intersect with super is on the asset side, not the tax side. If your SMSF holds direct property, state land tax and stamp duty rules apply to that property just as they would outside super, and rates vary meaningfully between states. Victoria and New South Wales generally have higher land tax rates and lower tax-free thresholds than South Australia or Tasmania, which matters if your SMSF strategy involves direct property in one of those higher-cost states. Payroll tax is another indirect factor for business owners: employer SG contributions are calculated on wages that are also subject to state payroll tax, though the SG obligation itself doesn't change based on location. Beyond property and payroll considerations for SMSFs and business owners, the core superannuation tax rates you'll encounter are the same no matter which state you call home.
Amber Wealth perspective: guiding clients through super tax changes
They get caught by timing, missed deductions, or a balance that quietly crossed $3 million without anyone checking. We assess a client's current position, model the actual outcomes under these thresholds, then implement the changes before 30 June, not after. Near-retirees, SMSF trustees, and business owners with growing balances tend to need this the most.
— Adam
Get tailored superannuation tax advice
There are ways to work through concessional caps, Division 293 exposure, and the new large balance thresholds on your own using ATO guidance and MoneySmart's calculators, and plenty of people do. But once your situation involves an SMSF, a spouse on a different income, or a balance approaching $3 million, the interactions between contribution timing, Centrelink tests, and deduction deadlines get hard to model correctly without seeing the whole picture at once.
Amberwealth provides superannuation and SMSF advice for clients across Victoria, New South Wales, South Australia, and Tasmania, face to face and online, built specifically around these thresholds rather than generic contribution guidance. A good starting point is our Superannuation Calculator, which lets you model your own balance and contribution scenarios before you speak with anyone. From there, book a retirement planning review with our team and we'll work through your specific numbers, caps, and timing together.
Where to check the official figures
Verify every rate and cap directly at the source: the ATO's pages on concessional contributions, payments from super, Division 293, and Super Guarantee rates, plus MoneySmart's tax and super guide.
Amber Wealth Pty Ltd (ABN 16 653 279 013) is a Corporate Authorised Representative (No. 1310815) of Lifespan Financial Planning Pty Ltd (ABN 23 065 921 735), holder of Australian Financial Services Licence (AFSL) No. 229892. Financial advice is provided by Adam Sobczak, ASIC Authorised Representative No. 1234769.
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