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  • Rounding of withholding amounts

    Withholding amounts calculated by applying this schedule are rounded to the nearest dollar. Results of 50 cents or higher are rounded upwards. If a TFN is not provided, ignore cents when calculating withholding amounts.

    Example: Super lump sum made by a super provider from a taxed element.

    Heather and Dean are members of the AAFund super fund. They are 59 and 61 years old respectively. They have decided to retire and take some of their super as a lump sum. The preservation age for both of them is 55. They are both over their preservation age.

    According to their entitlements, Heather and Dean will both receive a super lump sum of $250,000 from AAFund. Each super lump sum has a tax-free component of $30,000 and a taxable component of $220,000. Heather and Dean have previously provided their respective TFNs to AAFund.

    AAFund does not need to withhold from the tax-free component of $30,000, but must withhold an amount from the taxable component of $220,000. The taxable component of the super lump sum paid by AAFund is wholly made up of taxed elements.

    Amount to withhold for Heather:

    As Heather is over her preservation age but is still under 60, she is entitled to the low rate cap.

    1. Amount up to low rate cap = $205,000 (2018–19 income year cap amount)
    2. Amount above low rate cap = $15,000 ($220,000 − $205,000)
    3. Amount to withhold from $15,000 = $2,550 (17% of $15,000)

    Note: The low rate cap is indexed annually.

    Amount to withhold for Dean:

    As Dean is over 60 years old, no part of his super lump sum payment is subject to withholding.

    End of example

    Preservation age

    The withholding amount varies depending on whether the payee has reached their preservation age when the payment is made.

    Preservation age is determined using your payee’s date of birth. For example, if a member was born on 1 October 1962, they will reach their preservation age of 58 on 1 October 2018. The table below will help with this:

    Preservation age

    Date of birth

    Preservation age

    Before 1/7/1960

    55

    1/7/1960–30/6/1961

    56

    1/7/1961–30/6/1962

    57

    1/7/1962–30/6/1963

    58

    1/7/1963–30/6/1964

    59

    After 30/6/1964

    60

    Last modified: 14 Jun 2019QC 55468