Taxation of Super

Compared  to personal income tax  rates which can be as high as 46.5% (including the Medicare Levy), your super contributions made for you by your employer are taxed at just 15%.
Super investment earnings are also taxed at a maximum rate of 15%.
 
For average income earners there may be significant tax benefits in making pre-tax or salary sacrifice contributions rather than post-tax  contributions.  Tax deductions and offsets are also available to certain individuals, so it’s worthwhile learning about the different tax rules to ensure you take advantage of all the perks available.

What Tax Rates are applied to your Super?

Your super is taxed at concessional rates when:   
     
*  money comes into your account 
*  your super savings earn a return 
*  you  take  your  money  out  of  the  super  fund   
    
Money  that  comes  into  your  super account   
Employer contributions (including salary sacrifice contributions) are usually taxed at 15%.  Voluntary contributions that you make from your after-tax earnings are not subject to any additional tax when contributed to super.

Investment earnings on your super savings
Earnings (including capital gains) on your super savings are taxed at a maximum rate of 15%. This tax-rate can be much lower than investment earnings and capital gains outside of super where tax is calculated on your personal income tax rates (as high as 46.5%).
 
Money leaving your super fund  
The amount of tax you pay when you retire and/or apply to get your super benefit will depend on a number of factors, including how much super you have and how and when you take your super.      
If you are aged over 60 years, you will pay no tax  when  withdrawing  from  a  taxed  scheme such as your super account with Aviva.  

Tax deductions and offsets self-employed or unemployed  
If you are self-employed, substantially self -employed (less than 10% of your assessable income is from eligible employment) or  not working for an income, you can claim a full personal income tax deduction for personal contributions to super. Such contributions, up to a certain level, are concessionally taxed. You should discuss this with your financial adviser to ensure your taxable contribution does not exceed these thresholds.    
    
Pension payments    
An alternative to taking your super as a lump sum is to commence a retirement income stream. There may be tax advantages for you. When you receive payments from an income atream any payments you receive after age 60 are tax free. Investment earnings on your money used to buy the pension are also tax‑free.
Prior to age 60, your pension payments become part of your assessable income and are subject to normal income tax rates. However, you also have access to a 15% income tax offset. If you have also made after-tax contributions to your super,  you  may  also  be  entitled  to  a  tax-free portion. All of which means you pay less tax.