📣 We're thrilled to announce that a brand new website for Taxopia is coming soon!

30% Super Tax on Balances Exceeding $3 Million from 2025

As of 1st July 2025, earnings from super balances exceeding $3 million will increase to 30%.

The Australian government has announced a reasonable compromise to tackle the cost of tax concessions on large superannuation balances. Treasurer Jim Chalmers revealed that starting from July 1, 2025, earnings from super balances exceeding $3 million will have a higher tax rate of 30%, while the existing rate of 15% will continue for earnings on super balances below $3 million that are in the accumulation phase. Chalmers added that this change is modest and only affects 0.5% of Australians with balances above $3 million. The remaining 99.5% of Australians with superannuation accounts will continue to enjoy the same generous tax breaks that apply today.

Treasurer Chalmers had two major choices to make before finalising the new policy, which is expected to generate around $2 billion annually. The first option was to introduce a new superannuation tax bracket at $3 million, which is what the government eventually chose. The second option was to impose a cap of $3 million on the amount that could be held in the superannuation structure, with the excess removed. Chalmers had initially preferred the second option to avoid increasing taxes, but it was deemed inferior due to the complexities that would arise, such as forced sales of illiquid assets, capital gains tax implications, and resetting cost bases for assets that were sold or transferred.

Under the new policy, individuals will have a Total Superannuation Balance (TSB), and those with a TSB exceeding $3 million by the end of a financial year will be subject to an additional 15% tax on their earnings corresponding to balances above $3 million. This means that earnings attributable to balances above $3 million will generally attract a combined headline rate of 30 per cent.

Notably, the new tax limit is applicable per person and not per fund, such as a Self-Managed Superannuation Fund (SMSF). Furthermore, a separate Notice of Assessment will be issued to the Individual for the additional new tax and will function similarly to the existing Division 293 tax Notices.

Individuals subject to the new tax will be given the option to pay it out-of-pocket or from their superannuation funds. In cases where an individual has multiple superannuation funds, they can choose the specific fund from which the tax will be paid.

If the Fund derives any negative earnings in any one year, then the portion of the negative earnings that relate to that part of the Members superannuation balance that exceeds $3 million can be carried forward and offset against taxable excess earnings in future years.

Source: ATO

Example of a Balance exceeding $3 million

âž¡ Warren is 52 with $4 million in superannuation on 30 June 2025. He makes no contributions or withdrawals. By 30 June 2026, his balance has grown to $4.5 million.

âž¡ Warren’s calculated earnings are: $4.5 million – $4 million = $500,000

âž¡ His proportion of earnings corresponding to funds above $3 million is:

($4.5 million – $3 million) ÷ $4.5 million = 33%

➡ Therefore, his additional tax liability for 2025-26 is: 15% × $500,000 × 33% = $24,750

 

For more information about this targeted Superannuation concession, read the Fact sheet available from the ATO:
https://atotaxrates.info/wp-content/uploads/2023/03/better-targeted-superannuation-concessions-factsheet.pdf

Should you require any additional assistance please don’t hesitate to contact us.

Posted on 22-Mar-2023
See other blogs!

How to Set Up a Self-Managed Super Fund (SMSF): A Step-by-Step Guide

Self-Managed Super Funds (SMSFs) are becoming an increasingly popular option for Australians who want greater control over their retirement savings. Unlike traditional superannuation funds managed by external professionals, SMSFs allow you to manage your own investments, tailoring them to your specific needs and goals. However,

Read More »

Compliance in Company Setup

Overview of Company Setup and the Importance of Compliance Starting a business in Australia is an exciting endeavor, but amidst the planning and innovation, compliance stands as a critical pillar. Compliance ensures your business operates within legal and ethical boundaries, safeguarding its long-term viability. Just

Read More »

LIMITED-TIME OFFER – GET $100 OFF ON BASIC PACKAGE TODAY!*

You’ve chosen TAXOPIA LITE, a self-lodgment service. Please be aware that tax offices are starting to phase-out DIY paper lodgments and are encouraging the transition to digital.

Don’t be the last one to enjoy hassle-free digital lodgments. Upgrade to TAXOPIA BASIC PACKAGE today with a special limited-time $100 discount* and enjoy the benefits of having our accountants lodge for you.

As a bonus benefit for working with us, you get a lodgment deadline extension period to avoid penalties.

*The discount only applies to lodgments for one financial year. For clients requiring lodgment for multiple financial years, the discount applies only on the first year. all succeeding tax returns after that will be at regular price.

For the LITE Package: Please note that is a self lodgment service and does not include electronic lodgment by Taxopia. One of our qualified accountants will prepare your tax return, but it is your responsibility to print, sign & post to ATO to lodge.

GET $100 OFF ON BASIC PACKAGE

Continue With Lite Package

You’ve chosen the Taxopia Lite Package…

TAXOPIA LITE is a self-lodgement service. Please be aware that for majority of tax payers, the due date for self-lodged returns is 31st of October.

If you’re self-lodging overdue tax returns, it may put you at risk of incurring penalties from the ATO. We recommend you upgrade to TAXOPIA BASIC PACKAGE and enjoy the benefits of having our accountants lodge for you and get a lodgement deadline extension period to avoid penalties.

For the LITE Package: Please note that is a self lodgement service and does not include electronic lodgement by Taxopia. One of our qualified accountants will prepare your tax return, but it is your responsibility to print, sign & post to ATO to lodge.

GET STARTED WITH THE BASIC PACKAGE

Continue With Lite Package

Need a fast turnaround?*

If you require your taxes to be completed faster, we have a premium Fast Lane option available for this package which puts your request at the front of the queue of our workflow. 

*Excludes public holidays, weekends and office closure dates.

Need a fast turnaround?*

Taxopia’s standard turnaround for this Lite package is three business days. If you require your taxes to be completed faster, we have a premium Fast Lane option available. With this option, pay $220+ GST to get your taxes done within one business day!

*Excludes public holidays, weekends and office closure dates.

A friendly reminder…

Please note that is a self lodgement service and does not include electronic lodgement by Taxopia. One of our qualified accountants will prepare your tax return, but it is your responsibility to print, sign & post to ATO to lodge.

If this option suits your needs, please click below to get started.

Yes, let’s go!

You’ve chosen the Taxopia Lite Package…

Please note that is a self lodgement service and does not include electronic lodgement by Taxopia. One of our qualified accountants will prepare your tax return, but it is your responsibility to print, sign & post to ATO to lodge.

If this option suits your needs, please click below to get started.

Get started now!

* Sole Trader Package pricing conditions, please take note the pricing excludes the following items; however, these services can be provided for an additional cost.

If any of these exclusions apply to your businesses, please contact us, and we would be happy to provide you with a customised quote.

Get started now!

* Premium Package pricing conditions ($1300+ GST):

Please note that ALL our plans exclude the following:

If any of these exclusions apply to your businesses, please contact us, and we would be happy to provide you with a customised quote for any additional work.

Get started now!

* Standard Package pricing conditions ($850+ GST):

Please note that ALL our plans exclude the following:

If any of these exclusions apply to your businesses, please contact us, and we would be happy to provide you with a customised quote for any additional work.

Get started now!

* Basic Package pricing conditions: ($425+ GST):

If you do not qualify for this option, you will need to consider our Standard Package ($850+ GST).

Please note that ALL our plans exclude the following:

Please contact us for a customised quote if you require help on any of the excluded items.

Get started now!

Company or Trust Tax Return for Accountants & Bookkeepers

* BASIC PLAN ($425+ GST) CONDITIONS:

* STANDARD PLAN ($850+ GST) CONDITIONS:

Please note that ALL our plans exclude the following:

If any of these exclusions apply to your businesses, please contact us, and we would be happy to provide you with a customised quote for any additional work.

Get started now!

* Premium Package pricing conditions ($1300+ GST):

Please note that ALL our plans exclude the following:

If any of these exclusions apply to your businesses, please contact us, and we would be happy to provide you with a customised quote for any additional work.

Get started now!

* Standard Package pricing conditions ($850+ GST):

Please note that ALL our plans exclude the following:

If any of these exclusions apply to your businesses, please contact us, and we would be happy to provide you with a customised quote for any additional work.

Get started now!

* Basic Package pricing conditions: ($425+ GST):

If you do not qualify for this option, you will need to consider our Standard Package ($850+ GST).

Please note that ALL our plans exclude the following:

Please contact us for a customised quote if you require help on any of the excluded items.

Get started now!

Enquire Now

Fill out the form below and we will get back to you as soon as we can.