Do I pay tax on super withdrawals?
Over 60 and retired: lump sums and pension payments are tax-free. Between preservation age and 60: taxable component is taxed at marginal rates less a 15% offset. Before preservation age: up to 22% tax.
Tax on super withdrawals depends on your age and whether you've retired:
Age 60 and over, retired
Withdrawals from a taxed super fund (which is almost everything in Australia) are 100% tax-free, both as lump sums and as account-based pension payments. This is the payoff for the tax treatment super received during accumulation.
Preservation age (60) to 65, still working
You can access super via a transition to retirement (TTR) pension. Pension payments are tax-free. Lump sums still require a condition of release.
Under 60 (early release scenarios only)
If you qualify for early release (severe hardship / compassionate grounds):
- Tax-free component: no tax
- Taxable component: taxed at up to 22% (20% + 2% Medicare) on lump sums
Death benefits
Paid to a dependant (spouse, minor child): tax-free. Paid to a non-dependant (e.g. adult child): taxable component taxed at up to 17% (15% + 2% Medicare).
Sources
General information only — not financial advice. Super decisions are long-term; verify with a licensed adviser.