Super tax for non-residents of Australia: lump sums, pensions and DASP

Published 5 Oct 2026

Tax on taxed-element super from age 60: 0%; Lump sums and account-based income streams from a taxed source, 2026–27
Maximum rate on a taxed-element lump sum before 60: 20%; Excluding the Medicare levy, which foreign residents do not pay
DASP rate on the taxed element: 35%; 45% on the untaxed element; 65% on both for working holiday makers
Income tax treaties in force: 47; Countries and jurisdictions on Treasury's treaty list, March 2026

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Section 01 · From age 60

How is super taxed for non-residents aged 60 or older?

A super lump sum paid to a person aged 60 or older carries no Australian tax on its tax-free component or its taxed element, which the ATO treats as non-assessable, non-exempt income¹.

An account-based income stream paid after age 60 is also free of tax on its taxed element and tax-free component².

The untaxed element is taxed at every age. From age 60 the untaxed element of a lump sum is taxed at a maximum of 15% up to the untaxed plan cap, which is $1,935,000 for 2026–27, and at 45% above that cap¹.

The untaxed element of an income stream is taxed at marginal rates with a 10% tax offset³. The offset on the untaxed element is capped at $13,125 for 2026–27⁴.

The maximum rates the ATO publishes exclude the Medicare levy of 2%¹. Foreign residents for tax purposes do not pay the Medicare levy, so the maximum rates apply to them without it⁵.

Capped defined benefit income streams, such as lifetime pensions, follow a separate test. Where the tax-free component and taxed element paid in a year exceed the defined benefit income cap, 50% of the excess is assessed at marginal rates². The defined benefit income cap is $131,250 for 2026–27⁶.

Maximum rates, excluding the Medicare levy, which foreign residents do not pay. Capped defined benefit income streams are assessed on 50% of the amount above the $131,250 defined benefit income cap.
Tax on super payments to a person aged 60 or older, by component, Australia, 2026–27
Component	Lump sum	Account-based income stream
Tax-free component	No tax	No tax
Taxable component, taxed element	No tax¹	No tax³
Taxable component, untaxed element	Up to 15% to the untaxed plan cap of $1,935,000 per super plan; 45% above it¹	Marginal rates, less a 10% tax offset capped at $13,125⁴

Source · ATO, Payments from super; Super income stream tax tables; Tax on super benefits; Retirement withdrawal – lump sum or income stream; Transfer balance cap.

Savings balances at each age are compared in Average savings in Australia by age.

Section 02 · Before 60

How is super taxed for non-residents under 60?

A super lump sum paid to a person under preservation age is taxed at a maximum of 20% on the taxed element and 30% on the untaxed element up to the untaxed plan cap¹.

Preservation age is 60 for anyone born on or after 1 July 1964, so anyone under 60 in 2026–27 is below preservation age⁷.

The ATO's lower rates for people between preservation age and 60, including the $260,000 low rate cap from 1 July 2026, therefore do not apply to anyone under 60 in 2026–27¹.

A super income stream paid before preservation age is taxed at marginal rates with no tax offset³. A disability super benefit is the exception, with a 15% tax offset on the taxed element.

For a foreign resident, marginal rates start at 30% from the first dollar, because foreign residents have no tax-free threshold⁵. In 2025–26, foreign residents paid 30% on taxable income up to $135,000, 37% from $135,001 to $190,000 and 45% above $190,000⁸.

In an illustrative calculation at 2025–26 rates, a foreign resident with taxable income of $60,000 pays $18,000 of income tax before offsets and excluding the Medicare levy, compared with $8,788 for an Australian resident, a difference of $9,212⁹.

Income tax before offsets on selected taxable incomes, foreign resident and Australian resident, 2025–26 rates — Calculated from the published 2025–26 rate scales. Excludes the Medicare levy, which Australian residents generally pay and foreign residents do not, and all tax offsets, including the super income stream offsets. Foreign resident rates for 2026–27 were not yet listed by the ATO.

Section 03 · Taxed and untaxed

How do taxed and untaxed elements change the tax on super?

The untaxed element of a member's super lump sum is taxed at a higher maximum rate than the taxed element at every age. From age 60, the maximum rate is 15% on the untaxed element, compared with no tax on the taxed element¹.

The taxed element is the part of the taxable component on which the fund has already paid tax, at 15%. The untaxed element is the part on which the fund has not paid tax and is most common in public sector funds². The tax-free component generally comes from non-concessional (after-tax) contributions and is not taxed when withdrawn as a lump sum.

A fund calculates the components of each payment in proportion to the make-up of the account. This means a member cannot choose to withdraw only the tax-free component unless the whole account is tax-free².

A departing Australia superannuation payment (DASP) is taxed at 35% on the taxed element and 45% on the untaxed element¹. Working holiday makers pay 65% on both elements, and the tax-free component of a DASP is not taxed.

Death benefit lump sums paid to a non-dependant are taxed at a maximum of 15% on the taxed element and 30% on the untaxed element, regardless of the recipient's age¹.

Maximum tax rate on the taxable component of super lump sums, by payment type, Australia, 2026–27 — Maximum rates excluding the Medicare levy. Untaxed-element rates for member benefits apply up to the untaxed plan cap of $1,935,000; amounts above it are taxed at 45%. The tax-free component is not taxed in any of these payments.

Section 04 · Tax treaties

How do Australia's tax treaties apply to super paid overseas?

Australia's treaties with New Zealand, the United Kingdom and Germany make pensions paid to residents of the other country taxable only in the country of residence, although exceptions apply¹¹.

Australia has income tax treaties in force with 47 countries and jurisdictions, according to Treasury's list of income tax treaties as at March 2026¹². Each treaty sets out which country has the right to tax particular types of income.

Under the New Zealand treaty, a pension paid to a New Zealand resident is taxable only in New Zealand¹³. New Zealand does not tax the part of an Australian pension that Australia would not tax if the person were an Australian resident. Lump sums paid under a retirement benefit scheme are taxable only in the country where they arise.

The pensions articles of the United Kingdom and German treaties do not mention lump sums¹¹. Both treaties have an other income article under which income not dealt with elsewhere in the treaty is taxable in the country of residence and, where it arises in the other country, may also be taxed there¹⁴.

Under the German treaty, a pension first paid after 31 December 2016 may also be taxed in the country where it arises if, for more than 15 years in that country, the contributions were tax-deductible or did not form part of taxable employment income¹⁴.

Summarises the treaty text only. The treaty articles do not state how a particular super payment is classified.
Super pensions and lump sums in three of Australia's income tax treaties
Treaty	Pensions paid to a resident of the other country	Lump sums
New Zealand (2009), Article 18	Taxable only in the country of residence, which does not tax the part the paying country would not tax for its own residents¹³	From a retirement benefit scheme, taxable only in the country where the lump sum arises¹³
United Kingdom (2003), Articles 17 and 20	Pensions and annuities taxable only in the country of residence¹¹	Not mentioned in Article 17; Article 20 lets the source country also tax income the treaty does not otherwise deal with
Germany (2015), Articles 17 and 20	Taxable only in the country of residence, except that the source country may also tax a pension first paid after 31 December 2016 where contributions received tax concessions there for more than 15 years¹⁴	Not mentioned in Article 17; Article 20 lets the source country also tax income the treaty does not otherwise deal with

Source · Australia–New Zealand Convention (2009); Australia–United Kingdom Convention (2003); Australia–Germany Agreement (2015).

Section 05 · Fund earnings

How are super fund earnings taxed when a member lives overseas?

Investment earnings inside an Australian super fund are taxed at 15% in the accumulation phase and are tax-free in the retirement phase, according to the ATO².

The tax-free treatment is limited by the transfer balance cap, which restricts the amount that can be transferred into the retirement phase⁴. The general transfer balance cap rose from $1.6 million in 2017–18, when the cap began, to $2.1 million in 2026–27⁶.

From 1 July 2026, Division 296 tax reduces the tax concession on earnings for people with large super balances¹⁵. It applies an additional 15% to the share of a person's taxable super earnings that relates to a total super balance above the large super balance threshold of $3 million. An additional 10% applies to the share above the very large super balance threshold of $10 million. Both thresholds are indexed to the consumer price index.

Three residency conditions apply to a self-managed super fund (SMSF):

The fund is established in Australia, or at least one of its assets is located in Australia.¹⁶
Its central management and control is ordinarily in Australia, which the ATO generally accepts during a temporary absence of up to two years.¹⁶
It has no active members, or Australian resident active members hold at least 50% of the interests held by active members.¹⁶

The conditions apply at all times during the financial year¹⁶. An SMSF that fails the residency test and is not wound up, or does not have its benefits rolled over to a regulated Australian fund, becomes non-complying. A non-complying fund's assessable income is taxed at the highest marginal rate, which is 45%¹⁷.

General transfer balance cap, Australia, 2017–18 to 2026–27 — The general cap applies from 1 July 2017 and limits the total amount that can be transferred into the tax-free retirement phase.

The budget cost of superannuation tax concessions is covered in How much do superannuation tax concessions cost in Australia?

Section 06 · Reporting overseas

How is Australian super reported in the country of residence?

The country of residence taxes and reports Australian super under its own law, and New Zealand's Inland Revenue states that lump sum withdrawals or transfers from Australian super are not taxed in New Zealand¹⁸. Most double tax agreements give New Zealand the right to tax pensions, so most people receiving a foreign pension pay New Zealand tax on it when they file a return.

However, foreign pensions can be treated differently. The double tax agreement between New Zealand and the country where the super is paid from can affect how it is taxed in New Zealand¹⁸.

In Australia, foreign residents declare Australian pensions and annuities on an Australian tax return, according to the ATO⁵. A person leaving Australia permanently can lodge a final return before leaving or lodge from outside Australia.

A super fund issues a payment summary showing the taxable and tax-free amounts paid and any tax withheld². From age 60, the tax-free component and taxed element of a lump sum are not included in an Australian tax return.

Section 07

Super tax for non-residents: quick answers

Is super tax-free after 60 for someone living overseas?

Super paid to a person aged 60 or older carries no Australian tax on its tax-free component and taxed element, as a lump sum or an account-based income stream, although the country of residence can tax it under its own law. The untaxed element of a lump sum is still taxed in Australia, at up to 15% to the untaxed plan cap of $1,935,000 in 2026–27 and at 45% above it.

What tax rate applies to a departing Australia superannuation payment?

A departing Australia superannuation payment (DASP) is taxed at 35% on the taxed element and 45% on the untaxed element. The tax-free component is not taxed. Working holiday makers pay 65% on both elements.

Do non-residents pay the Medicare levy on super payments?

No. Foreign residents for tax purposes do not pay the Medicare levy, so the ATO's maximum super tax rates apply without it.

Can an Australian citizen living overseas withdraw super early?

An Australian citizen living overseas cannot withdraw super early because of the move, since leaving Australia is a condition of release only for former temporary visa holders. Australian citizens and permanent residents generally access super after retiring at or above preservation age, at 65, or on limited early-release grounds.

Does a tax treaty stop Australia taxing a super pension?

A tax treaty can stop Australia taxing a super pension, and the New Zealand, United Kingdom and German treaties make pensions paid to a resident of the other country taxable only in the country of residence, subject to exceptions. The treaty articles do not state how a particular super payment is classified, and the German treaty lets the source country also tax some pensions first paid after 31 December 2016.

Is Australian super taxed in New Zealand?

Lump sum withdrawals and transfers from Australian super are not taxed in New Zealand, according to New Zealand's Inland Revenue. Under the Australia–New Zealand treaty, a pension paid to a New Zealand resident is taxable only in New Zealand. New Zealand does not tax the part of the pension that Australia would not tax if the person were an Australian resident.

References

ATO, Key superannuation rates and thresholds: Payments from super · ato.gov.au ↑ b c d e f g h i j
Australian Taxation Office, Tax on super benefits · ato.gov.au ↑ b c d e f g
ATO, Super income stream tax tables · ato.gov.au ↑ b c
ATO, Retirement withdrawal – lump sum or income stream (QC73093) · ato.gov.au ↑ b c
ATO, Foreign and temporary residents · ato.gov.au ↑ b c
ATO, Key superannuation rates and thresholds: Transfer balance cap · ato.gov.au ↑ b
Australian Taxation Office, Super withdrawal options · ato.gov.au ↑ b c
ATO, Tax rates: foreign residents · ato.gov.au ↑
ATO, Tax rates – Australian resident (QC 73320) · ato.gov.au ↑
Australian Taxation Office, Departing Australia superannuation payment (DASP) · ato.gov.au ↑
Convention between Australia and the United Kingdom for the Avoidance of Double Taxation (2003) · austlii.edu.au ↑ b c
Treasury, Income tax treaties · treasury.gov.au ↑
Convention between Australia and New Zealand for the Avoidance of Double Taxation (2009) · austlii.edu.au ↑ b c
Agreement between Australia and the Federal Republic of Germany for the Elimination of Double Taxation (2015) · treasury.gov.au ↑ b c
ATO, Key superannuation rates and thresholds: Division 296 tax thresholds and interest · ato.gov.au ↑
ATO, Check your SMSF is an Australian super fund · ato.gov.au ↑ b c d e
ATO, Our SMSF non-compliance actions · ato.gov.au ↑
Inland Revenue (New Zealand), Foreign superannuation · ird.govt.nz ↑ b