GESB - What tax will you have to pay?

What tax will you have to pay on your super?

If you're planning your retirement, you're probably aware that once you access your super benefits, you may have to pay tax. It is a good idea to make sure you understand what taxes will apply to you:

Not all super funds are taxed in the same way. Members of "untaxed" super funds have not paid tax on their contributions and earnings, and instead will pay tax once they access their super benefits. With "taxed" super funds, members pay the tax upfront.
Your benefit may have both tax-free and taxable components
It is also important to remember that if you haven't provided your Tax File Number (TFN) you may have to pay additional tax
Your age at retirement will also impact at what rate you will be taxed
If you chose to take your benefit as a lump sum, the tax implications will be different than if you chose to use your benefit to buy into a retirement income stream.

Figuring out when and how tax is applied to your super can be daunting. GESB has developed a Tax and Super fact sheet that will give you a better understanding of tax and super funds.

Case Study: Alison's story

Alison, who has a GESB Super account, recently celebrated her 61st birthday, and has decided that it's time to retire. As GESB Super is a taxed superannuation fund, Alison has been paying tax on her contributions and earnings along the way. Alison is over 60 and therefore she has the option of taking her benefit as a lump sum without paying any additional tax. Alison has chosen to use her superannuation benefits to purchase an Allocated Pension from GESB. Because she is over 60, her pension income will be tax free and non-assessable, and she will also not be taxed on any investment earnings that it generates.