When you save for retirement in Australia, your superannuation, a government-mandated retirement savings system where employers contribute a portion of your salary. Also known as super, it's designed to help you live comfortably after work. But it’s not tax-free. Superannuation tax kicks in at every stage—when money goes in, grows inside the fund, and comes out. Most people don’t realize how much they’re paying until they retire, and that’s where things get messy.
There are three main points where tax applies: concessional contributions, pre-tax payments from your employer or personal contributions you claim as a tax deduction, which are taxed at 15% when they enter your super fund. Then there’s investment earnings, the interest, dividends, and capital gains your super fund makes each year, also taxed at 15%. And finally, withdrawals, the money you take out when you retire—which can be tax-free if you’re over 60, but taxed if you’re younger or take it as a lump sum before meeting a condition of release.
High earners face extra taxes. If you earn more than $250,000 a year, you pay an extra 15% tax on your super contributions—that’s 30% total. And if you contribute more than $27,500 in concessional contributions, you get hit with penalties unless you use carry-forward rules. Meanwhile, non-concessional contributions (after-tax money) have a cap of $110,000 per year, and going over that triggers heavy taxes. Many people think super is just about saving, but it’s really about managing tax timing.
What you can do matters. If you’re under 60, delaying withdrawals can save you thousands. If you’re over 60, switching to a pension phase lets you take tax-free income. Salary sacrificing into super reduces your taxable income now, but you’ll pay 15% later—so it works best if your current tax rate is higher than 15%. And if you’re a low-income earner, the government might add money to your super through the co-contribution scheme. It’s not magic—it’s math.
There’s no one-size-fits-all rule. Your tax bill depends on your age, income, how much you’ve saved, and when you plan to retire. Some people pay almost nothing in super tax because they’ve structured everything right. Others get blindsided because they didn’t track contribution caps or misunderstood when withdrawals are taxed. The key is knowing the rules before you make a move.
The posts below break down real cases: how much super tax people actually pay, what happens when you withdraw early, how the tax-free threshold works, and how to use the bring-forward rule for non-concessional contributions. You’ll find answers to questions like: Is it better to pay off your mortgage or boost super? Can you still contribute after 65? What if you’re self-employed? No fluff. Just what you need to avoid overpaying and keep more of your retirement savings.
In New Zealand, Superannuation and KiwiSaver withdrawals are tax-free, but other retirement income like dividends or foreign pensions may be taxed. Know what counts as taxable income in retirement.
