Schedule 12 – Tax table for superannuation lump sums

This withholding schedule is 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 schedule

This schedule applies to payments made from 13 October 2020.

You should use this schedule 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.

See also:

• Australian Tax TreatiesExternal Link
• Departing Australia superannuation payment

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  

Taxable component

• 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  

Taxable component

• 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 study and training support loans.

See also:

• What are tax treaties?

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 a taxable component - 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.

See also:

• SuperStream
• Untaxed plan cap

Table A: Withholding rates for super lump sums

Table A: Withholding rates for super lump sums

Type of payment and tax component	Age of person at the date the payment is received	Amount subject to PAYG withholding	Rate of withholding
Member benefit – taxed element of the taxable component	Under preservation age	Whole amount	22%
	Preservation age to 59 years	Amount up to low rate cap	Nil
		Amount above the low rate cap	17%
	60 years and above	Whole amount	Nil
Member benefit – untaxed element of the taxable component	Under preservation age	Amount up to untaxed plan cap	32%
		Amount above untaxed plan cap	47%
	Preservation age to 59 years	Amount up to low rate cap	17%
		Amount above the low rate cap up to the untaxed plan cap	32%
		Amount above untaxed plan cap	47%
	60 years and above	Amount up to untaxed plan cap	17%
		Amount above untaxed plan cap	47%
Member benefit – total of preserved benefits is less than $200	Any age	Nil – amount is non-assessable, non-exempt income	n/a
Member benefit – terminal medical condition payment	Any age	Nil – amount is non-assessable, non-exempt income	n/a
Death benefit paid to a dependant – taxed and untaxed elements of the taxable component	Any age	Nil – amount is non-assessable, non-exempt income	n/a
Death benefit paid to a non-dependant – taxed element of the taxable component	Any age	Whole amount	17%
Death benefit paid to a non-dependant – untaxed element of the taxable component	Any age	Whole amount	32%
Death benefit paid to the trustee of the deceased estate	Any age	None	Nil

Additional information

Low rate cap: For the 2020–21 income year, the low rate cap is $215,000 and is indexed annually. The low rate cap is:

• in relation to super lump sums paid to an individual who has reached their preservation age, the maximum amount of the taxable component that is allowed the lowest rate of tax
• a lifetime limit
• allocated to the taxed element first before allocating the remaining low rate cap to the untaxed element.

Untaxed plan cap: For the 2020–21 income year, the untaxed plan cap is $1,565,000 and is indexed annually. For the low rate cap or the untaxed plan cap in other years, visit Key superannuation rates and thresholds.

Lump sum less than $200: There is no withholding required from the whole amount if it is paid by a regulated super fund, complying ADF or RSA provider as a super lump sum and it is the payee’s entire benefit.

A terminal medical condition exists if:

• two registered medical practitioners have certified, jointly or separately, that the member suffers from an illness, or has incurred an injury, that is likely to result in the member's death within 24 months of the date of certification
• at least one of the registered medical practitioners is a specialist practicing in an area related to the member's illness or injury
• the certification period has not ended for each of the certificates.

The certification period is 24 months from the date of certification.

A death benefit dependant for taxation purposes includes:

• spouse of the deceased
• child of the deceased under 18 years old
• a person who had an interdependency relationship with the deceased
• a person who was a dependant of the deceased just before the latter died
• any individual who is paid a lump sum death benefit if the deceased died in the line of duty as a member of the defence force, a member of the Australian Federal Police or the police force of a state or territory, or a protective service officer (as defined in the Australian Federal Police Act 1979).

A spouse of the deceased includes another person (of any sex) who:

• was in a relationship with the deceased that was registered under a law of a prescribed state or territory
• lived with the deceased on a genuine domestic basis in a relationship as a couple, although not legally married.

A child of the deceased includes:

• an adopted child, stepchild or ex-nuptial child
• a child of the deceased's spouse
• a child of the deceased within the meaning defined in the Family Law Act 1975 (for example, somebody who is considered to be a child of a person under a state or territory court order giving effect to a surrogacy agreement).

An interdependency relationship includes:

• a close personal relationship between two people who live together, where one or both provides for the financial and domestic support and personal care of the other
• a close personal relationship between two people who live together but do not satisfy one or more of the requirements mentioned in the previous dot point due to either or both of them suffering from a physical, intellectual or psychiatric disability.

For further information on interdependency relationships and before accepting that a person is financially dependent, phone us on 13 10 20.

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.

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 reached their preservation age of 58 on 1 October 2020. 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

Payment summaries

You must provide a PAYG payment summary – superannuation lump sum to the recipient of the super lump sum within 14 days of making a lump sum payment.

Payment summaries can also be printed using software that conforms to ATO reporting specifications.

For information and reporting specifications, visit Software developersExternal Link.

PAYG withholding publications

You can access all PAYG withholding tax tables and other PAYG withholding publications at:

• Tax tables
• PAYG withholding.

Work out the tax to withhold from super lump sum payments made to an individual.