From 1 July this year, Super payouts are made up of two components - a tax-free and a taxable component.
A tax-free component does not count towards your taxable income.
A taxable component is the part of the payment which is taxable. This will usually be broken up again into "taxed" and "untaxed" elements.
The taxed element had already had tax paid on it in the fund. It may or may not need to have additional tax paid on it once it is paid out. How much tax you may still need to pay on the taxed portion depends on the type of payout and your age when taking it. If you are 60 or over, you pay no tax on the taxed element of your payout.
The untaxed element is the part of your payout that hasn’t had any tax paid on it in the fund. It is still taxable so needs to included in your tax return as income. How much tax you will need to pay on the untaxed element depends on the type of payout and your age.
When you receive your payout, your super fund will send you a payment summary which will show the components (including any untaxed and taxed elements) and the tax withheld.
If the taxable component includes both taxed and untaxed elements, each is taxed separately according to different rules. For more detiled information, visit the ATO page How Your Super Is Taxed.
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