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  • How to work out the withholding amount

    Attention

    Warning:

    This information may not apply to the current year. Check the content carefully to ensure it is applicable to your circumstances.

    End of attention

    If your payee has provided you with their tax file number (TFN)

    Calculating a withholding amount for super lump sum

    If your payee receives a super lump sum and has provided you with their TFN, you must calculate the amount to withhold by applying the rates set out in table A.

    A super lump sum can be made up of two components:

    • a tax-free component
    • a taxable component.

    You must withhold an amount from the taxable component, including lump sum death benefit paid to non-dependants. Do not withhold from the tax-free component.

    If the person entitled to receive the super lump sum asks you to roll over their lump sum, you are generally not liable to withhold from any of the rolled over amount. However, you may be liable to withhold if the benefit being rolled over consists of an amount that is an untaxed element in the fund that exceeds the untaxed plan cap.

    Attention

    A lump sum death benefit cannot be rolled over – whether paid to dependants or non-dependants.

    End of attention

    What if your payee has not provided you with their TFN?

    If your payee has received a super lump sum and has not provided you with their TFN before the payment is made, you must withhold the following:

    • 46.5% from the taxable component in a payment to a resident payee
    • 45% from the taxable component in a payment to a foreign resident payee (ignoring any cents).
    Attention

    If your payee is over 60 years of age at the date the payment is received, and the lump sum does not contain an element untaxed in the fund, you are not required to withhold where they have not provided their TFN.

    If the lump sum contains an element untaxed in the fund, you should withhold from this element at 46.5% for residents or 45% for foreign residents.

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    Last modified: 06 Mar 2015QC 25955