30% tax applies to super fund balances greater than $3m

From the 1st of July 2025, the future earnings of super fund balances greater than $3m will be taxed at 30%. Currently, these earnings are taxed at either 0%, 10% or 15%.

The Albanese Government expects these tax changes to affect 80,000 people (0.5% of Australians) and raise $2 billion annually in revenue.

A super fund is a type of investment vehicle used in Australia to save for retirement. It is also known as a superannuation fund or simply “super.”

The Australian government requires employers to contribute a percentage of their employees’ salaries into a super fund, which is designed to provide financial support during retirement. Individuals can also make voluntary contributions to their super fund, either through salary sacrifice or as after-tax contributions.

Super funds are managed by financial institutions, such as banks or investment companies, and can be invested in a range of assets, including stocks, bonds, and property. The performance of a super fund can vary depending on the investment strategy and the level of risk taken.

There are two main types of super funds in Australia: industry funds and retail funds. Industry funds are typically run by unions or employer associations, while retail funds are run by financial institutions. There are also self-managed super funds, which are managed by individuals or small groups of people.

Super funds offer tax benefits, such as lower tax rates on investment earnings and contributions, to encourage individuals to save for retirement. However, there are also restrictions on when and how funds can be accessed, with most funds only becoming available once a person reaches a certain age or retires.