The amount of tax you pay depends on your age at the time of the withdrawal, the amount you take out and the superannuation component from which the withdrawal is taken.
When you, or someone on your behalf, make a superannuation contribution the money is classified based on its tax status. The tax status, or ‘component', is determined by the type of contribution and whether any tax has been paid on the money. The component determines how much tax you pay when you withdraw this money from super. There are three different components, tax free, taxable - taxed element, and taxable - untaxed element.
- Tax-free component. Tax has already been paid on the money. There will be no further tax if you withdraw this money. This component is created from after-tax contributions you make into your own account, or contributions made by your spouse.
- Taxable component - taxed element. Some tax has already been paid on the money, however, further tax may be payable if you withdraw the money before you reach age 60. Salary sacrifice contributions, employer superannuation guarantee contributions and tax-deductible contributions made by self-employed persons fall into this category.
- Taxable component - untaxed element. Tax has not already been paid on the money. Some tax will be payable when you withdraw the money, based on your age and the amount you withdraw.
Your annual statement from your superannuation fund provider will outline the components of your superannuation savings.
The information in this document reflects our understanding of existing legislation, proposed legislation, rulings etc as at the date of issue. In some cases the information has been provided to us by third parties. While it is believed the information is accurate and reliable, this is not guaranteed in any way.