Tax
Super is usually the most tax effective way to invest your retirement savings. That’s because super is taxed at a much lower rate than other types of investments, to encourage you to save for retirement. And, with the better super changes super became even more tax effective from 1 July 2007.
| Tax | Tax rate | How it applies |
|---|---|---|
| Contributions tax |
15% | Paid on all employer contributions (including salary sacrifice) and on personal contributions you claim a tax deduction for. |
Tax on investment earnings |
Up to 15% | Although the maximum rate is 15%, the actual amount paid is generally lower because LGsuper can use imputation credits from share dividends to reduce tax. There is no tax on investment earnings on pension accounts. |
| Tax on lump sum benefit payments | Varies | There are two tax components - a tax free component that is generally your after-tax contributions, and a taxable component. The amount of tax you pay on the taxable component depends on your age. First $140,000** tax free then taxed at 16.5%* Age 60 plus *Includes 1.5% Medicare levy |
| Tax on pension payments | Varies | Aged 55 to 59 Part will be tax-free if you start your pension with any tax free component. You also receive a tax offset of 15% of your pension payment. |
