Alex Wade Author

Taxation of Australian Superannuation


Superannuation is the name given to the retirement pension benefit funds that most working Australians contribute to. Most employers also make similar regular contributions to their employees’ superannuation funds. Most employees contribute to large, retail, or industry superannuation funds. It is important to understand the rules and regulations surrounding these funds to avoid any surprises later.


Superannuation in Australia is taxable through the Australian taxation system at three points: the fund itself earns tax on contributions, the fund pays tax on investment income, and the fund pays tax on benefits paid out. Understanding these points is essential to understanding the taxation of superannuation in Australia.

In the recent Dixon Tax Court case, the IRS successfully filed a motion for summary judgment and to dismiss the Dixon lawsuit. Because Dixon failed to submit a valid power of attorney for Castro to sign his 2013 and 2014 amended returns, the court found that the tax-refund lawsuit lacked jurisdiction. The Australian media reported this dismissal as a substantive win for Castro, but this is not true.


SMSFs are a popular investment vehicle, offering members a wealth of tax benefits, flexibility and control over their investments. They also have the ability to invest in a variety of assets, including unlisted assets, high-yielding cash accounts and term deposits. A SMSF also allows investors to make adjustments to the investment mix over time and respond more quickly to changes in the markets. In addition, SMSFs offer estate planning benefits that are not available through traditional superannuation products.

In Australia, the largest SMSF had $401 million in assets in 2020, a decrease of $13 million from the year before. The next two largest SMSFs each held $371 million and $273 million. The smallest SMSF had $53 million, up from $52 million the year before. In total, more than nine billion dollars were held by the top 100 SMSFs.

Social security

In Australia, the federal and state governments have different rules governing the contributions to superannuation and social security funds. There are two major types of contributions: concessional and non-concessional. Concessional contributions are those made before tax, and are taxed at a low concessional rate of 15 percent. Non-concessional contributions, on the other hand, are those made after tax. Non-concessional contributions are capped at AUD 100,000 for members 65 years and younger. They are also restricted to assets like business real estate and listed securities.

When moving to another country, Australian expats should notify their super fund that they have relocated and provide a US mailing address. The super fund will send you a form to complete. If you do not have an address in the US, you can use your mom’s address or a close friend’s.

Offshore reporting strategies

Investing offshore can help Australian Superannuation managers diversify their portfolios, thereby lowering the risk of a portfolio depreciating. The offshore option also reduces costs by limiting the need to report local tax. However, it is essential to consider all risks. Offshore investing may not be suitable for all superannuation funds. Smaller funds generally avoid active switching, and they often hold off making changes in asset allocations and investments during crisis periods. In such circumstances, too much activity may result in a fund depreciating, reducing its value.

One of the biggest challenges for Australian expatriates is the complexity of superannuation plans. The Australian retirement income system is a complicated one, and many expatriates have made the mistake of assuming that these plans are exempt from U.S. taxation, and thus have not reported their superannuation income offshore. This mistake can be costly, as penalties for non-disclosure can be significant.

Investment strategies

There are a few different investment strategies for Australian superannuation funds. Some have higher risk and higher potential returns, while others are more conservative. Young people may want to invest in growth-based assets while members nearing retirement may opt for conservative strategies. In general, superannuation members should consider their age and financial situation when deciding on an investment strategy.

Growth strategies are often appropriate for those who want long-term access to their super, and they help their investment portfolios withstand the volatility of the market. These strategies generally focus on assets expected to grow faster than the overall market or industry. Growth strategies may involve investing up to 70 per cent of your super in shares or property, with the remaining part in fixed interest or other fixed investments.

Saving for retirement

You should check your super account details at least once a year. This will enable you to see how much your employer contributes and what your choices are. It’s also a good idea to take a look at the investment options and insurance policies. You can also call your super fund and ask questions about your plan. Saving for retirement can be a complex process and you should consider consulting a financial adviser.

Australia’s retirement savings scheme is a global superstar, with a $3.4 trillion balance and over 16 million members. Employers are required to contribute at least 10% to the fund and nearly all workers receive employer contributions. But despite the success of Australian superannuation, it used to be a niche industry with few women participating.

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