This page contains some general information about tax rates and thresholds for super contributions and benefits. Explanations of the terms and acronyms appear in the glossary.

While superannuation is currently taxed at three points - on the way in as contributions, inside the fund as earnings and on the way out as benefits – it will soon mainly be taxed just at two points, as contributions and earnings, if the Government is able to introduce their proposals to remove all superannuation taxes for people over the age of 60. However, regardless of how and at what stage superannuation is taxed, it is still taxed at extremely concessionally levels compared to other types of investment.

Limits to these tax concessions nonetheless exist in the form of restrictions on the amount of contributions and benefits attracting concessional tax treatment.
While an individual or company (on behalf of its employees) may contribute unlimited amounts into superannuation, there is a limit to which those contributions attract a tax deduction. That limit is called the Maximum Deductible Contribution (MDC). The maximum depends on the individual’s age and whether the contribution is a company contribution or the individual is self-employed.

The Australian Government requires all employers to provide a minimum level of superannuation for their employees. The Super Guarantee system is the mechanism for this support. From 1 July 2002 the minimum level of support increased to 9 per cent of salary (as defined by the tax office). The employer may cap the contribution to 9 per cent of the Maximum Contributions Base, though some contribute more.

Benefits receive concessional tax treatment for a specified amount of the benefit paid. Benefits over and above that amount are taxed at higher rates. These limits are called Reasonable Benefit Limits (RBL) and apply (at different rates) to both lump sums and pensions.
If the benefit is less than the RBL the concessional benefit payment tax rates apply. The age of the person and how much time the person was in the fund before and after 30 June 1983 are determinants of the tax rate.

Some non-super employer benefits are also considered as Eligible Termination Payments (ETPs) and are afforded concessional tax treatment. These are bona fide redundancy payments and concessional treatment is applied only to part of the payment.

Threshold Summary

	2004/05	2005/06	2006/07
Super Guarantee (SG)
Minimum employer support	9%	9%	9%
Maximum contributions base (qtr)1	$32,180	$33,725	$35,240
Age baed Maximum Deductible Contributions 1 (MDCs)
Under 35	$13,934	$14,603	$15,260
35 - 49	$38,702	$40,560	$42,385
50 and over	$95,980	$100,587	$105,113
Self-employed - required contribution to get maximum deduction
Under 35	$16,912	$17,804	$18,680
35 - 49	$49,936	$52,414	$54,847
50 and over	$126,306	$132,450	$138,484
Surcharge thresholds1
Lower ATI threshold	$99,710	$104,496	n/a
Upper ATI threshold	$121,075	$126,887	n/a
Denominator	$1,709	$1,791	n/a
Reasonable Benefits Limits1 (RBLs)
Lump sum	$619,223	$648,946	$678,149
Pension	$1,238,440	$1,297,885	$1,356,291
Eligible Termination Payment (ETP) Threshold
Post 30 June 1983 threshold1	$123,808	$129,751	$135,590
Bona fide redundancy payments (tax-free amounts)
Initial amount	$6,194	$6,491	$6,783
Additional years	$3,097	$3,246	$3,392
Company tax rate	30%	30%	30%

Source: The Australian Taxation Office
1. Indexed to AWOTE each 1 July

Eligible Termination Payments (ETP) Tax

ETP Tax Rates
Components		Assesstable Portion	Tax Rate
Pre 1 July 1983 component		5%	MTR1
Concessional component		5%	MTR1
Undeducted contributions		Not assessable	Exempt
CGT Exempt component		Not assessable	Exempt
Post 30 June 1994 invalidity component		Not assessable	Exempt
Post 30 June 1983 component		100%	See table below
Excessive component		100%	47%1
Maximum Rate of Post June 1983 component
	Under 55 years	55 years and over
		Up to post 30 June 1983 threshold	Excess over post 30 June 1983 threshold
Taxed element	20%1	Nil	15%1
Untaxed element	30%1	15%2	30%1
1 Medicare levy is payable on this component
2 Threshold at June 2005 was $123,808
Death benefit ETPs
Portion	Payment to dependent	Payment to non-dependent
		Component	Maximum Rate %
Within deceased's penion RBL	Exempt	Post 30 June 1983-untaxed element Post 30 June 1983 - taxed element3 Other components	30% 15% As per standard ETP rates
Above deseased's pension RBL		Excessive component

Tax Rates and Medicare Levy

Residential Individual Taxation Rates*
2004/05		2005/06		2006/07
Threshold	MTR	Threshold	MTR	Threshold	MTR
$6,000	17%	$6,000	15%	$6,000	15%
$21,600	30%	$21,600	30%	$25,000	30%
$58,000	42%	$63,000	42%	$75,000	40%
$70,000	47%	$95,000	47%	$150,000	45%
* Does not include Medicare levy
Medicare levy thresholds*
	2003/04	2004/05	2005/06
Lower threshold	$15,529	$15,902	$16,284
Upper threshold	$16,788	$17,191	$17,604
*Different thresholds apply for senior Australians and pensioners.
Co-contributions paid by government
Taxable Income			Top-up multiple
$28,000 or less			150%
$38,000			100%
$48,000			50%
$58,000			0%
*Does not include Medicare levy
For every extra $1,000 you earn the co-contribution factor on any personal contributions decreases by 5% until it phases out when you earn $58,000
Contributions to age 75
Age
Less than 65	Regular contribution rules apply
6o 75	Employer contributions only if member is gainfully employed
75 or more	Only personal contributions permitted
The Medicare levy is calculated as follows:
$0 - lower threshold			Nil
Exceeds lower threshold and less than upper threshold			Nil + 20% of excess over lower threshold
Upper threshold and above			1.5% of full amount

Source: The Australian Taxation Office, 2005 Commonwealth Budget papers

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