Tax on super

Tax is payable under these conditions

Money going in

Before-tax (concessional) contributions to your super, from you or your employer, are taxed at 15%.

The 15% rate is for amounts below the 2025/26 cap of $30,000. If your combined income including concessional contributions exceeds $250,000 per year, an additional tax of 15% will apply to the concessional contributions above that threshold. Rollovers from most super funds are generally not taxed. However, rollovers from some super funds may contain an untaxed element which may be taxed when transferred to Brighter Super.

After-tax (non-concessional) contributions are tax free up to $120,000 per year. On amounts above the 2025/26 cap ($120,000 per year), you may pay up to 47% in tax.

Investment earnings

Income from investment returns is taxed at 15%. However, the effective tax rate may be lower because of allowable deductions, tax credits and offsets. The investment earnings you receive are the amount after the deduction of tax on investment income.

Money you withdraw from your super

Once you reach age 60 you can withdraw your super tax free as either a regular income paid from your Brighter Super Pension or a lump sum. If you make withdrawals from your super before reaching age 60, the tax depends on your age and circumstance of payment.

Tax on lump-sum withdrawals if you are under 60

Any lump sum you withdraw from Brighter Super is generally made up of two components: tax-free and taxable. You cannot choose to make a withdrawal tax free. Any withdrawal is made proportionally from both components.

Tax free

The tax-free component includes any pre-July 1983 component at 30 June 2007 and all after-tax contributions paid in, such as:

Voluntary or extra member contributions for which no tax deduction has been claimed.
Super co-contribution.
Spouse contributions received.
Any tax-free components of money transferred from other super funds to Brighter Super.
Any tax-free components of eligible termination payments transferred to Brighter Super.
Any amounts that are tax-free as a result of total and permanent disability or terminal illness.
Capital gains tax-exempt contributions (lifetime limit).

Taxable

The taxable component generally includes:

Employer and salary sacrifice contributions.
Member contributions for which a tax deduction has been claimed.
Investment earnings.

Tax treatment ¹

Your age or circumstance of payment	Taxable component
Under preservation age	Taxed at 22% including the Medicare levy.
Reached preservation age (60)	Tax-free
Total benefit under $200 (any age)	Tax-free
Terminally ill	Tax-free
Departed temporary residents - not a working holiday maker (DASP payment²) (any age)	35% taxed element 45% untaxed element
Departed working holiday makers who hold a subclass 417 or 462 visa (DASP payment) (any age)	65%

¹ This information is subject to change per financial year.
² Please refer to the Departing Australian Superannuation Payment section in the Member Guide.

For additional information, refer to the ATO website.

Additional tax for high income earners

If you’re a high-income earner, you may be liable for an additional tax on your superannuation contributions, known as Division 293 tax.

Division 293 tax is an additional 15% tax on certain contributions and is generally payable if your combined income and concessional contributions for Division 293 purposes is more than $250,000 in the financial year.

If you are liable for this extra tax, the Australian Taxation Office (ATO) will calculate the amount payable when you submit your annual tax return and advise you accordingly.

You can find out more about Division 293 tax, including examples, on the ATO website.
Tax on exceeding the $2 million general transfer balance cap

The general transfer balance cap is currently set at $2 million. This is the maximum amount that can be transferred from your super into a pension account, where the investment earnings are tax-free. The transfer balance cap applies to current retirees and anyone yet to enter the retirement phase.

The transfer balance cap is indexed in $100,000 increments annually and will grow in line with the Consumer Price Index. As a result, there is not a single cap that applies to all individuals and if you started your income stream in a previous financial year, a lower cap may apply.

Amounts above the cap are subject to a transfer balance tax based on notional earnings determined by a legislative formula. The tax is payable to the ATO for each day the amount remains in excess of the cap.

The cap does not include investment earnings in your income stream account. So, if your retirement income stream account balance grows over your personal cap amount, you don’t need to do anything. Additional income tax rules may apply to defined benefit income streams.

You can find out more about excess transfer balance tax, including examples, on the ATO website.
Tax on permanent incapacity

If your permanent incapacity claim is approved and you withdraw your benefit as a lump sum, rollover or start a pension and receive regular payments, concessional tax treatments may apply.

You can out find more information on tax treatments on the ATO website or seek financial advice.
Tax on death benefits

Death benefits are tax-free if paid to a tax dependant.

If the benefit is paid to someone who is not considered a tax dependant, the taxable portion of the benefit is taxed at 17% (including Medicare levy) and the untaxed component is taxed at 32% (including Medicare levy).

Find out more on our Nominate a beneficiary page.

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