Element taxed in the fund

Part of what is termed as the “taxable component” of a superannuation payout from July 2007.

From July 1, 2007, super lump-sum and pension payouts are made up of two components: a tax-free component and a taxable component. In short, whatever is not the tax-free component is the taxable component of the payout. (See Proportioning rule)

The taxable component of a super payout is divided into:

* Element taxed in the fund. These are super savings on which tax has already been paid in the fund. This element includes earnings of a super fund that have been taxed and contributions (such as salary-sacrificed contributions) which have been taxed on entering the fund.
* Element untaxed in the fund. No tax has been paid in the hands of the fund. These include certain super savings from unfunded public-sector super schemes that have not been subject to earnings tax. It also covers certain life insurance payouts from a fund where a deduction has been claimed for the insurance premiums
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