The Costello Budget and the Taxes on Pensions

You can have as much money as you want in superannuation. And the internal tax rate in superannuations is 15%. Now, if you're earning more than $250,000 at the moment, and you put your concessional contribution in of $27,500, you'll be taxed 15% like everyone else. But there's a little thing called division 293. At the end of the year when you do your tax return, the ATO will write your letter and say, you owe us an extra 15% contributions tax. This sort of extends it to the earnings as well.