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FigureTax
Updated for FY 2025-26

Super Death Benefit Tax Calculator

See how much tax is payable on a superannuation death benefit paid as a lump sum — and what your beneficiary actually keeps — depending on whether they’re a dependant, and whether it’s paid directly or via your estate.

Who receives the benefit?

For tax, a dependant is a spouse/de facto, a child under 18, an interdependency or financial dependant. An adult child who isn't financially dependent is a non-dependant.

How is it paid?

Paying a non-dependant via the estate removes the 2% Medicare levy — a key planning lever.

The bulk of most super. Shown on the fund's benefit statement.

Usually only from untaxed (some public-sector) funds or life-insurance proceeds paid within super. Often $0.

From after-tax (non-concessional) contributions. Always tax-free to any recipient.

Enter the super components to estimate the death benefit tax and what the beneficiary keeps.

How super death benefit tax works

A super death benefit paid as a lump sum has up to three parts: a tax-free component (always untaxed), and a taxable component split into a taxed element and an untaxed element. Who pays tax depends on the recipient:

  • Death-benefits dependant (spouse, child under 18, financial/interdependency dependant) — the whole lump sum is tax-free.
  • Non-dependant (e.g. an independent adult child), paid directly — taxed element 17% (15% + 2% Medicare), untaxed element 32% (30% + 2%).
  • Non-dependant, via the estate — no Medicare levy, so 15% and 30%.

The adult-child trap

Many people assume their children can inherit their super tax-free. But an adult child who is not financially dependent is a non-dependantfor tax — so the taxable component of their inheritance is taxed at 15–32%. This is the single biggest surprise in super estate planning, and it’s why re-contribution strategies exist.

Worked examples

Adult child, paid directly

A $500,000 taxed-element benefit is left to an independent adult child, paid directly. It's taxed at 17%, so $85,000 tax — the child keeps $415,000.

Paying via the estate saves the Medicare levy

On a $400,000 taxed element, paying the adult child directly costs $68,000 (17%). Paying via the estate costs $60,000 (15%) — a $8,000 saving, because the 2% Medicare levy doesn't apply to estate payments.

Spouse receives it tax-free

The same super left to a spouse (a death-benefits dependant) is completely tax-free — regardless of the taxed/untaxed split.

Frequently asked questions

Is superannuation taxed when you die?
It depends who receives it. A death-benefits dependant (for tax) receives a super lump sum completely tax-free. A non-dependant (such as an independent adult child) pays tax on the taxable component — the tax-free component is never taxed.
Who is a death-benefits dependant for tax purposes?
A spouse or de facto partner, a child of the deceased under 18, a person in an interdependency relationship, a person who was a financial dependant just before death, or someone receiving a benefit due to a line-of-duty death. Importantly, an adult child (18+) who is not financially dependent is a NON-dependant for tax — so their share is taxed, even though super law may still let them receive it.
How much tax does an adult child pay on my super?
On the taxable component paid directly to them: 17% on the taxed element (15% plus the 2% Medicare levy) and 32% on any untaxed element (30% plus 2%). If the benefit is paid via your estate instead, the Medicare levy doesn’t apply, so those rates fall to 15% and 30%. The tax-free component is never taxed.
What are the taxed and untaxed elements?
Most super is a "taxed element" (contributions and earnings already taxed in the fund). An "untaxed element" is less common — it mainly arises in some public-sector funds or where life-insurance proceeds are paid within super — and is taxed at a higher rate. Your fund’s benefit statement shows the split.
Does paying through my estate reduce the tax?
For a non-dependant it can, because the 2% Medicare levy does not apply to death benefits paid to the estate (the legal personal representative). The underlying 15%/30% still applies, but you save the Medicare levy. Whether the estate route suits you depends on your broader estate plan — get advice.
Can I reduce super death benefit tax before I die?
A common approach is a re-contribution strategy: if eligible, withdraw a taxable amount and re-contribute it as a non-concessional (after-tax) contribution, converting it to tax-free component that non-dependants receive tax-free. This is subject to contribution caps and eligibility — see our non-concessional contributions calculator and seek advice.
Is this calculator official ATO advice?
No. FigureTax is independent and provides general information and estimates only, not financial or tax advice. It covers lump-sum death benefits (not income streams). Confirm your components with your fund and seek licensed advice before acting.

Related super calculators: Non-concessional contributions & bring-forward (for re-contribution strategies), Division 293 tax, and carry-forward contributions.

General information only. This calculator estimates tax on a lump-sum super death benefit under standard ATO rules for 2025-26; it does not cover death benefit income streams and may not reflect your circumstances. It is not financial or tax advice. Confirm your super components with your fund and seek licensed advice before acting.