Tax on lump sum withdrawals

Your pension balance is made up of two components - the taxable component and the tax-free component. As their names suggest, the taxable component attracts tax, while the tax-free component doesn't. The amount of tax applied to the taxable component of your payment depends on your age.

Tax payable

Component of super benefit

Below Preservation Age

Preservation Age to 59

Age 60 and over

Tax-free

Nil

Taxable

20% + Medicare levy

No tax up to the low-rate cap of $210,000,*

15% + Medicare levy on the remaining balance

 Nil

 *Applicable for the 2019-20 financial year and indexed annually.

 

Transition to Retirement members should note that they can only make lump sum withdrawals in limited circumstances, such as retiring or meeting another standard condition of release.