Super Death Benefit Tax Calculator

Establish the Recipient’s Tax Position

A super death benefit paid as a lump sum to a death benefits dependant is tax-free. A non-dependant’s taxable components can attract tax. This calculator compares maximum standard tax rates and the payment left after that tax.

Establish tax dependency from the client records before choosing a setting. The tax definition covers a spouse or former spouse, a child under 18 and qualifying financial dependency or interdependency. An independent adult child can receive super under fund rules while remaining a non-dependant for tax.

Keep evidence of the relationship and support at death, along with the fund’s decision. A family label alone cannot establish financial dependency. Division 302 of the income tax law defines death benefits dependants and their tax treatment.

Separate the Benefit Components

Copy the tax-free component, taxed element and untaxed element from the benefit statement. Keep all components on one payment basis. For an ordinary income stream, combine the components over one payment period and use the recipient’s age at payment.

The tax-free component stays tax-free in the supported cases. For a non-dependant lump sum, maximum income tax is 15% on the taxed element and 30% on the untaxed element. The full Medicare setting adds 2% to those taxable components for a direct payment.

The calculation assumes a complying Australian fund, an adult Australian resident recipient and an established payment entitlement. It excludes capped defined-benefit income streams, foreign-resident treaty cases and historical non-dependant income streams. A minor’s lump sum to an established tax dependant is tax-free, but this tool’s age entry starts at 18.

Calculate the Recipient’s Net Benefit

In the fictional default example, a direct lump sum contains $50,000 tax-free, $300,000 taxed and $50,000 untaxed. For a non-dependant, component income tax is $0, $45,000 and $15,000. Full Medicare adds $7,000, leaving $333,000 from $400,000.

Change the same fictional recipient to an established tax dependant. All component tax and Medicare become $0, leaving the full $400,000. Age does not change that lump-sum result.

For an ordinary income stream, the taxed element becomes tax-free when either the deceased at death or the recipient at payment is 60 or over. The untaxed element remains assessable with a 10% offset. When both are under 60, the taxed element receives a 15% offset and the untaxed element receives none.

Income-stream mode applies the 45% top income tax rate before those offsets. With $5,000 tax-free, $30,000 taxed and $10,000 untaxed, two people under 60 produce $14,300 including full Medicare and $30,700 net. If either is 60 or over, the same amounts produce $3,700 tax and $41,300 net.

These are maximum-rate comparisons, not final assessments or withholding instructions. Other income, deductions and available offsets can reduce the actual tax. Medicare reductions can also change the result. Full exemption removes the levy only when the recipient qualifies. Study repayments and Medicare levy surcharge are excluded.

Use the ATO superannuation withholding schedules for the payer’s separate withholding calculation. Reconcile the recipient’s annual assessment in your tax software. The 2025-26 and 2026-27 options share the component rates and age rules used here.

Payments Through an Estate

A payment to an estate follows the dependency of the people who benefit, or are expected to benefit, from that super. Enter the established non-dependant percentage of each component. The remaining share is assumed to benefit tax dependants.

The estate calculation applies that same percentage to every component. Where components are allocated differently, calculate each allocation separately. It applies maximum income tax of 15% and 30% to the non-dependant shares of the taxed and untaxed elements, with no Medicare levy.

For the fictional $400,000 lump sum, a 50% non-dependant estate share produces $22,500 tax on the taxed element and $7,500 on the untaxed element. The estimated estate amount after that tax is $370,000. A wholly non-dependant estate share produces $60,000 tax and $340,000 net.

The fund’s payment to the estate has no PAYG withholding. That does not remove the estate’s income tax liability. The estate result estimates a tax provision before distribution, rather than the immediate bank receipt. Select lump sum for an estate payment and record the expected beneficiaries before using the percentage.

Amounts stay on this page. The calculator saves no entries and sends no benefit details to Tax Genie or the ATO.