Accounts in Australia
Every kind of account and pension the planner offers in Australia: what each one is, when money can come out, how it is taxed, and the pages we read the rules from.
Most Australian retirement savings are superannuation, and how super is taxed depends on its phase. While you are still building it, the fund pays 15% on what it earns. Once it pays you a retirement-phase pension, nothing it earns is taxed and nothing it pays you from 60 is taxed either. A transition to retirement pension sits between the two. Savings outside super are taxed at your normal rates.
Each phase has its own row in the money step, and your fund's statement says which phase each account is in. A defined benefit pension, a lifetime annuity and the Age Pension pay an income and go in the pension step instead.
Rules as of the 2026 tax year, read from the authorities on 2026-07-29. Each account lists the pages we read it from.
Accounts you can enter
A new plan starts with 29% in Investments outside super, 71% in Superannuation you are still building, until you replace it with your own accounts. Where that split comes from: Australian Bureau of Statistics, Survey of Income and Housing 2019-20: households outside the wealthiest fifth.
Investments outside super
Dividends and interest are taxed each year at your normal rate, and profit is taxed when you sell.
Shares, managed funds, exchange-traded funds, term deposits and savings held in your own name. Interest and dividends are taxed each year at your normal rate, and the credits attached to Australian dividends are paid back to you if they exceed your tax. When you sell, only the profit is taxed, half of it for something held more than a year. From July 2027 the plan follows the new rule: growth after that date is taxed in full once inflation is stripped out, while growth before it keeps the halving.
When one of a couple dies, investments passed to the partner keep their original cost, so no tax falls due then.
How it is taxed, rate by rate, is on the tax page.
- In the withdrawal orders
- With the ordinary accounts
- Pays out
- Whenever you like
- At the first death
- Your partner takes it over as it stands
Superannuation you are still building
Out of reach until you are 60 and retired, or 65. Until then the fund pays 15% tax on what it earns. It becomes a retirement-phase pension at the age you choose, once you can reach it. At most 2.1 million in today's money can move; the rest stays here.
Super still being built up, through your employer's contributions and your own. It is preserved: nothing comes out until you are 60 and have retired, or turn 65. The fund pays 15% on what it earns from inside the account, and the plan does the same, on the whole of each year's return.
At the age you choose, once you can reach it, the plan starts a retirement-phase pension from it. The law lets at most 2.1 million (from July 2026) move into retirement phase in total. The plan moves up to that amount, in today's money rising with prices, and the rest stays here, still paying 15% on its earnings.
- In the withdrawal orders
- With the accounts taxed on the way out
- Before the earliest age
- Nothing comes out before 60
- Pays out
- Whenever you like
- Taxed while you hold it
- Yes, paid from inside the account
- At the first death
- Your partner takes it over as it stands
- Age it becomes a pension From 60 to 100. We assume your retirement age.
While you are still saving, your super fund pays tax you never see: 15 percent on its earnings, about 10 percent on long held gains, and 15 percent on every contribution going in, with a further 15 percent on contributions if your income is above 250,000. The plan now takes 15 percent of each year's return out of super that is still saving, but at the full rate on every kind of return, so it overstates the tax on long held gains. The tax on contributions is still not charged: amounts you enter are what lands in the fund.
Your real tax is higher/anyone still building up super rather than drawing it
At most 2.1 million can move into the tax free part of super. When your super starts paying you a pension we move up to that ceiling and leave the rest where the fund still pays 15 percent on its earnings. Three shortcuts: the ceiling rises with prices each year rather than in steps of 100,000, each super account you enter has its own ceiling where the law gives you one in total, and pension payments never free up room under it.
Could go either way/anyone with more than about 2.1 million in super, and anyone holding two super accounts that together pass it
From July 2026 a very large super balance is no longer fully sheltered. An extra 15 percent applies to the share of your fund's earnings sitting above 3 million, and another 10 percent above 10 million, billed to you personally. We do not charge it. In our source material a 4 million balance earning 240,000 pays 9,000 a year and a 6 million balance pays 27,000. It reaches fewer than one super holder in two hundred, and the threshold is per person rather than per couple.
Your real tax is higher/up to $27,000 a year/anyone with more than 3 million in super, a small group nationally and a larger one among people who use a tool like this
- Australian Taxation Office: When you can withdraw your super (read 2026-10-07)
- Australian Taxation Office: Transfer balance cap (read 2026-10-07)
- Federal Register of Legislation (Australian Government): Superannuation Industry (Supervision) Regulations 1994 (read 2026-10-07)
The law behind it
Superannuation in retirement phase
From age 60 there is no tax on what it earns and no tax when you take it out, but a minimum must come out each year. It is the reason where your money sits matters more in Australia than almost anywhere.
An account-based pension, the usual way Australians draw their super once retired. Nothing it earns is taxed and nothing it pays you from 60 is taxed, and its payments do not count as taxable income, so they leave every allowance free for your other income.
A minimum must come out each year, from 4% of the balance under 65 rising to 14% at 95 and over. In the year it starts the law cuts the minimum by the part of the year already gone, and since the plan does not know your start date it takes half. What you do not spend moves to your investments outside super, where its earnings are taxed from then on.
It can start only once you are 60 and retired, or 65. Your partner can take it over at your death, tax free.
- In the withdrawal orders
- With the tax-free accounts
- Before the earliest age
- Nothing comes out before 60
- Pays out
- At least a legal minimum every year
- At the first death
- Your partner takes it over as it stands
From retirement the plan takes the legally required minimum out of your super pension every year, from 4 percent of the balance under 65 rising to 14 percent at 95 or more. The payment itself is tax free, and whatever you do not spend is moved to an ordinary account, where its earnings are taxed from then on. Over a long retirement that migration is the main way an Australian retiree acquires a tax bill at all, and the plan now prices it. In the year your pension starts we charge half the minimum, because the law cuts it by the part of the year already gone and we do not know your start date. What else we simplify: the government has twice halved the minimums in a market crash, and we always charge the full table, which makes the plan slightly more careful in bad markets.
Your real tax is lower/anyone drawing an Australian super pension through a market crash, when the real minimums have historically been halved
At most 2.1 million can move into the tax free part of super. When your super starts paying you a pension we move up to that ceiling and leave the rest where the fund still pays 15 percent on its earnings. Three shortcuts: the ceiling rises with prices each year rather than in steps of 100,000, each super account you enter has its own ceiling where the law gives you one in total, and pension payments never free up room under it.
Could go either way/anyone with more than about 2.1 million in super, and anyone holding two super accounts that together pass it
From July 2026 a very large super balance is no longer fully sheltered. An extra 15 percent applies to the share of your fund's earnings sitting above 3 million, and another 10 percent above 10 million, billed to you personally. We do not charge it. In our source material a 4 million balance earning 240,000 pays 9,000 a year and a 6 million balance pays 27,000. It reaches fewer than one super holder in two hundred, and the threshold is per person rather than per couple.
Your real tax is higher/up to $27,000 a year/anyone with more than 3 million in super, a small group nationally and a larger one among people who use a tool like this
Australia has no wealth tax, no inheritance tax and no gift duty, so there is nothing of that kind for us to have left out. There is one charge on death we do not model: super left to an adult child, or to anyone else who was not a dependant, is taxed at 15 percent, or 30 percent on the part that came from an untaxed fund, plus the health levy. A spouse or a financial dependant receives it tax free. It falls on what you leave behind rather than on any year of your plan.
Could go either way/anyone planning to leave super to an adult child rather than to a spouse
- Australian Taxation Office: Retirement withdrawal: lump sum or income stream (read 2026-10-07)
- Australian Taxation Office: Payments from super (read 2026-10-07)
- Australian Taxation Office: Transfer balance cap (read 2026-10-07)
- Federal Register of Legislation (Australian Government): Income Tax Assessment Act 1997 (read 2026-10-07)
The law behind it
Transition to retirement pension
Super you started drawing from 60 while still working. It pays between 4% and 10% of its balance each year and cannot be taken as a lump sum. The fund still pays 15% tax on what it earns until it becomes a retirement-phase pension when you retire, or at 65.
A transition to retirement pension lets you draw on super from 60 while you are still working. Each year it pays between 4% and 10% of its balance, and it cannot be taken as a lump sum. What it pays you is tax free, but the fund still pays 15% on what it earns.
It becomes a retirement-phase pension when you retire, at the age you choose, or at 65 at the latest. From then on its earnings are tax free, within the same 2.1 million limit as all your super.
- In the withdrawal orders
- With the accounts taxed on the way out
- Before the earliest age
- Nothing comes out before 60
- Pays out
- Between a legal minimum and maximum every year
- Taxed while you hold it
- Yes, paid from inside the account
- At the first death
- Your partner takes it over as it stands
- Age it becomes a pension From 60 to 100. We assume your retirement age.
While you are still saving, your super fund pays tax you never see: 15 percent on its earnings, about 10 percent on long held gains, and 15 percent on every contribution going in, with a further 15 percent on contributions if your income is above 250,000. The plan now takes 15 percent of each year's return out of super that is still saving, but at the full rate on every kind of return, so it overstates the tax on long held gains. The tax on contributions is still not charged: amounts you enter are what lands in the fund.
Your real tax is higher/anyone still building up super rather than drawing it
At most 2.1 million can move into the tax free part of super. When your super starts paying you a pension we move up to that ceiling and leave the rest where the fund still pays 15 percent on its earnings. Three shortcuts: the ceiling rises with prices each year rather than in steps of 100,000, each super account you enter has its own ceiling where the law gives you one in total, and pension payments never free up room under it.
Could go either way/anyone with more than about 2.1 million in super, and anyone holding two super accounts that together pass it
- Australian Taxation Office: Retirement withdrawal: lump sum or income stream (read 2026-10-07)
- Australian Taxation Office: When you can withdraw your super (read 2026-10-07)
- Federal Register of Legislation (Australian Government): Superannuation Industry (Supervision) Regulations 1994 (read 2026-10-07)
The law behind it
Kinds of pension
A pension paid to you as an income goes in the pension step, not here. Choose its kind there and the plan taxes it by that kind's rules; leave it on standard and it is taxed like a state or workplace pension.
Lifetime or term annuity bought with super
Not taxed when it is paid to you at 60 or over.
This covers lifetime and fixed-term annuities and other retirement income products bought with super from July 2017. One started before then counts as a defined benefit pension instead, and half of what it pays above 131,250 a year (in 2026-27) is taxed, which the plan does not do.
- Australian Taxation Office: Retirement withdrawal: lump sum or income stream (read 2026-10-07)
- Australian Taxation Office: Super income stream tax tables (read 2026-10-07)
- Federal Register of Legislation (Australian Government): Income Tax Assessment Act 1997 (read 2026-10-07)
The law behind it
Where other things you hold go
- The Age Pension
- Leave it at zero in the pension step, as the planner does. It is tested against your income and savings, so it rises as your savings fall, and the plan does not apply those tests: a fixed amount would overstate your income early in the plan and understate it late. The Moneysmart Retirement Planner estimates it for you.
- A defined benefit pension from a taxed fund
- Enter it in the pension step, after tax. It is tax free from 60 up to 131,250 a year, and half of anything above that is taxed, which the plan does not do.
- CSS, PSS and other untaxed public sector schemes
- Enter the pension in the pension step, before tax. The plan then taxes it at your normal rates, without the 10% offset the law gives, so it shows more tax than you would pay.
- An annuity bought with savings outside super
- Enter it in the pension step. Only the part of each payment above the return of your purchase price is taxed, and the plan cannot split that out: after tax it shows no tax, before tax it taxes your own money coming back.
- Investment bonds and super held abroad
- Enter them as investments outside super. An investment bond pays 30% inside the bond and nothing after ten years, which the plan does not model. For super held abroad, enter what it was worth when you became resident as what you paid.
New rules not in the model yet
- A minimum tax on capital gains
- From July 2027 a gain made outside super is no longer halved: the part left after inflation is taxed in full, and the plan applies that. The same law charges that gain at least 30%, unless you receive any Age Pension that year. The plan does not charge the minimum yet.