New Super Tax

New Super Tax

What Is New Super Tax?

New Super Tax is a 15% tax on superannuation fund earnings over $1.7 million per person.

It was introduced by the Australian government in May 2021 as part of a suite of measures to improve the sustainability of the superannuation system.

Who Is Affected by New Super Tax?

The New Super Tax will affect people with superannuation account balances over $1.7 million.

This includes both:

• Individuals with multiple superannuation accounts
• Self-managed superannuation funds (SMSFs)

How Is New Super Tax Calculated?

The New Super Tax is calculated as 15% of the amount of your superannuation fund earnings that exceed $1.7 million.

For example, if your superannuation account balance is $2 million and you earn $100,000 in investment returns over the year, your New Super Tax liability would be $1,500.

When Is New Super Tax Payable?

New Super Tax is payable when you lodge your annual income tax return.

The tax is calculated on the total amount of your superannuation fund earnings for the financial year, regardless of whether you withdraw any money from your account.

How to Minimize Your New Super Tax Liability

There are a few things you can do to minimize your New Super Tax liability, such as:

• Consolidate your superannuation accounts
• Withdraw excess superannuation funds before you reach retirement age
• Make additional contributions to your superannuation account to reduce your taxable income

Conclusion

New Super Tax is a significant change to the superannuation system.

It is important to understand how it will affect you and to plan ahead to minimize your tax liability.