When concessional or tax-deductible superannuation contributions are received by your superannuation fund, they are taxed at 15% - this then classifies them as taxed contributions.  

Read more on concessional contributions versus non-concessional contributions in our recent updates.

Once these concessional contributions are received, they are:

• - Taxed at 15% in the fund. 
• - In addition, income on the earnings in the fund, each year is taxed at 15%. 

However, this is one of the safest entities to hold assets and investments in (if not the safest!) and one of the lowest tax rates available.

Once the member of the fund (i.e., you!) stops working the superannuation portion of their fund become a pension fund and the following applies to the taxed portion of the fund:

• - Income is taxed at 0%; and
• - Payments to the member/retiree are taxed at 0% when received
•  

This means a 0% tax rate in retirement, which is very advantageous.  So, we say that as superannuation is the bridge to retirement, the contributions tax is the toll to cross the bridge. So, a necessary impost to get where you are going on your journey.

Disclaimer: This information is general in nature, and you should examine your situation carefully as the legislation or further information becomes available. So, before acting on this or any other information, it is important to seek professional advice related directly to you and your circumstances.  Should you require our assistance, contact your Primarius Team leader, or email us at info@primarius.net.au