• Schedule 12 – Tax table for superannuation lump sums

    For payments made on or after 1 July 2017

    This document is a withholding schedule made by the Commissioner of Taxation in accordance with sections 15-25 and 15-30 of Schedule 1 to the Taxation Administration Act 1953 (TAA). It applies to withholding payments covered by paragraph 12-85(a) of Schedule 1 to the TAA.

    Using this table

    You should use this table if you make a super lump sum payment to an individual.

    This schedule also provides information on the withholding requirements when an untaxed element of super interest is rolled over.

    Super lump sums

    A super lump sum payment includes a:

    • lump sum member benefit paid to an individual where a condition of release has been satisfied - for example, retirement, terminal medical condition, severe financial hardship, compassionate grounds
    • lump sum death benefit paid to an individual following the death of the member or account holder
    • commutation of a super income stream (part or all of a super income stream is exchanged for a lump sum).

    A super lump sum may be paid from a super fund, approved deposit fund (ADF) or a retirement savings account (RSA).

    Components of a super lump sum

    Before you can work out the withholding amount, you must calculate the components of the super lump sum.

    A super lump sum may have two components:

    • a tax-free component
    • a taxable component which can include an
      • element taxed in the fund (taxed element)
      • element untaxed in the fund (untaxed element).
       

    You do not withhold from the tax-free component.

    Working out the withholding amount

    You must calculate the amount to withhold by applying the rates set out in table A if your payee:

    • is an Australian resident
    • receives a taxable component of a super lump sum
    • has provided you with their TFN.

    These rates include the Medicare levy of 2%.

    If the payment is to be made to a foreign resident you will need to check if there is a tax treaty with their country of residence. The full list of our tax treaties is maintained by Treasury and can be found in the Australian Tax Treaties table. If, because of the treaty, the super lump sum is assessable only in the other country, then no withholding is required.

    If a foreign resident's super lump sum is assessable in Australia, you are required to withhold from the payment. Adjust the rates set out in table A to exclude the Medicare levy of 2%.

    Different withholding rates apply for temporary residents who request a departing Australia superannuation payment. Phone us on 13 10 20 or follow the link below.

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    Payments not subject to PAYG withholding

    The following super lump sums are not subject to PAYG withholding:

    • a payment made to a person who is suffering from a terminal medical condition
    • a payment made to a dependant after the death of the member or account holder
    • an amount paid to the trustee of a deceased estate after the death of the member.

    When a TFN has not been provided

    Different withholding rates apply where the payee of the super lump sum has not provided you with their TFN before the payment is made.

    Paid to an Australian resident

    • Under 60 years old:
      • taxable component (taxed element and untaxed element) – withhold 47% (ignoring cents)
       
    • 60 years old or over:
      • taxed element – no amount is required to be withheld
      • untaxed element – withhold 47% (ignoring any cents).
       

    Paid to a foreign resident

    Check if there is a tax treaty with the payee's country of residence. If the super lump sum is assessable in the other country, no withholding is required.

    If the super lump sum is assessable in Australia, use the following withholding rates:

    • Under 60 years old:
      • taxable component (taxed element and untaxed element) – withhold 45% (ignoring any cents)
       
    • 60 years old or over:
      • taxed element – no amount is required to be withheld
      • untaxed element – withhold 45% (ignoring any cents).
       

    Do not allow for any tax offsets or Medicare levy adjustments. Do not withhold any amount for:

    • Higher Education Loan Program (HELP) debts
    • Student Start-up Loan (SSL) debts (includes ABSTUDY SSL debts)
    • Trade Support Loan (TSL) debts
    • Financial Supplement debts.

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    Rollovers

    If the person entitled to receive the super lump sum asks you to roll over their benefit, you are generally not required to withhold from any of the rolled-over amount.

    However, if the rollover benefit consists of an untaxed element that exceeds the untaxed plan cap you are required to withhold at the following rates:

    • amount of the untaxed element up to the untaxed plan cap – no amount required to be withheld
    • amount of the untaxed element above the untaxed plan cap – withhold 47%.

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

    Example: Rollover contains an untaxed element

    Tom asks his fund to roll over his super interest of $1.5 million which consists wholly of an untaxed element. The untaxed plan cap amount for 2017-18 is $1.445 million.

    These are the amounts required to be withheld:

    • up to the untaxed plan cap = $1,445,000 (no withholding required)
    • above the untaxed plan cap = $55,000 ($1,500,000 − $1,445,000)
    • from $55,000 = $25,850 ($55,000 × 47%).

    The net rollover of $1,474,150 ($1,500,000 − $25,850) is required to be reported to the receiving fund within 3 days to meet the SuperStream data and payments standard. You are also required to provide a statement to the member with 30 days of the rollover.

    End of example

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    Last modified: 14 Jun 2017QC 52078