Your Self Managed Super Fund can be the key to expanding the money you have aside for retirement, but you still need to pay tax, and therefore take the necessary steps to ensure you don’t pay too much.

An SMSF tax return service from Online Super Fund helps manage the process smoothly, but here’s an explainer of how an SMSF is taxed to get you started.

In short:

• The SMSF tax rate you pay depends on whether the fund is in accumulation phase (typically taxed at 15%), retirement phase (eligible pension income taxed at 0%), or a mix of both.
• Investment earnings, capital gains and assessable concessional contributions are generally taxed at 15% in accumulation, while SMSF tax for pension-phase income may be exempt under ECPI rules.
• Concessional contributions (employer and personal deductible) are always taxed at 15%.
• SMSF tax is usually paid after the annual return is lodged, though the ATO can require SMSFs in tax payable positions to make PAYG instalments to pre-pay the estimated tax over the year in advance.
• A complete SMSF tax return service includes financial statement preparation, audit coordination, ECPI/actuary certificates where needed, annual return lodgement, and guidance on ATO duties, helping avoid common mistakes like incorrectly mixing contributions with pension accounts.

How SMSF tax works

The tax rate your SMSF pays depends on whether it is in the accumulation phase, retirement phase or a combination of both.

Most SMSFs are taxed at 15% in the accumulation phase, which is the default position for members who are still working or contributing to super. Investment earnings, capital gains and assessable contributions all fall under this tax rate.

If the SMSF is in 100% retirement phase with all member benefits in Account Based Pension accounts, the tax rate on eligible pension income drops to 0%.

If your SMSF runs both accumulation and retirement phase pension accounts during the financial year, the tax outcome is calculated using an actuary certificate. This determines the proportion of the fund that is tax-free, known as the Exempt Current Pension Income (ECPI). The percentage is based on how long and how much of the fund was supporting retirement phase Account-Based Pension accounts throughout the year.

Types of tax SMSFs pay

There are a few different categories of tax that may apply to an SMSF:

Contributions tax

All concessional contributions, including employer contributions and personal deductible contributions, are taxed at 15%, even if the SMSF has members in pension phase. This is because contributions must first be allocated to an accumulation account and are not eligible for the pension-phase exemption.

Capital gains tax

If an investment is held for more than 12 months, your SMSF may be eligible for the one-third CGT discount, reducing the effective tax rate on capital gains to 10% when in the accumulation phase. SMSFs in full pension phase that meet the ECPI rules may be fully exempt from CGT.

These rules form the backbone of how SMSF tax is assessed each year. Your SMSF accountant can explain in more detail if you’re unclear.

Read more: Common SMSF Accounting Mistakes (and how to avoid them)

How and when SMSF tax is paid to the ATO

SMSF tax is paid after your annual return is lodged, unless your SMSF is in the PAYG instalment system, where tax is paid in advance throughout the year.

The PAYG instalment system is an ATO requirement for SMSFs in a tax payable position, and can be helpful because it prevents a lump sum bill at year end that you have to find the funds for.

Annual tax due dates:

SMSF tax return due dates are set by the ATO and depend on the fund’s circumstances, including whether a tax agent is appointed and the fund’s lodgement history. Common due dates include:

• 15 May – for most SMSFs that are up to date and lodged by a registered tax agent
• 28 February – for newly established SMSFs lodging their first annual return through a tax agent
• 31 October – may apply where an SMSF lodges without a tax agent or has a history of late lodgement, as determined by the ATO

Because due dates can vary, trustees should always confirm their specific lodgement deadline with their accountant or directly via ATO guidance.

An SMSF accountant from Online Super Fund can help make sure your reporting and payment obligations are up to date.

PAYG instalments

PAYG instalments are pre-payments of expected tax, calculated by the ATO based on the previous tax return lodged. These are paid either quarterly or annually. Your SMSF accountant can help you figure out if this is a suitable approach for you and how much money to keep aside.

Funds that are entirely in retirement phase usually do not need to pay PAYG instalments because they typically have no taxable income.

For an overview of what is included in tax preparation, visit our SMSF tax return service page.

What an SMSF tax return service includes

Before your SMSF tax return can be lodged, the fund must be audited by an independent SMSF auditor. This step is mandatory and ensures your fund is compliant with superannuation law.

For SMSFs with both accumulation and pension accounts, an actuary certificate is required to determine the ECPI percentage. This figure directly affects your fund’s taxable income, so it must be calculated accurately.

Your SMSF tax return service typically includes:

• Preparation of financial statements
• Coordination of the independent audit
• Calculation of ECPI where required
• Completion and lodgement of the annual return
• Guidance on PAYG instalments and ATO correspondence

The most common SMSF tax issue to watch out for

Be careful when it comes to mixing contributions and rollovers with pension accounts.

Contributions and rollovers cannot be added directly to an existing pension account. Even if a member of your SMSF has been in pension phase all year, any new contributions must be placed into an accumulation account, which means the fund may no longer be 100% tax-free for that financial year.

There are strategies to maintain your fund’s tax-free status where eligible, such as moving contributions into a new pension account or withdrawing the amounts if the member meets certain conditions of release. However, these steps must be taken in the correct way and in consultation with an SMSF accountant so they are recorded accurately and don’t cause problems down the track.

Why choose Online Super Fund for your SMSF tax management?

With more than 653,000 SMSFs operating across Australia, trustees increasingly look for specialists who can manage compliance accurately and efficiently.

Online Super Fund focuses exclusively on SMSF accounting work, which means we can deliver:

• Accurate and consistent application of SMSF tax rules
• Support with audits, ECPI calculations and annual lodgements
• Best practice processes that reduce errors and delays
• Personal service that prioritises communication and clarity

Our goal is to make SMSF tax compliance simple and stress-free for trustees, regardless of whether your fund is in accumulation, retirement or a combination of both.

Ready to simplify your SMSF tax?

If you want reliable support managing your SMSF tax and compliance, we are here to help.

Reach out today to learn more about our SMSF tax return service.

SMSF Tax FAQs

What tax rate will my SMSF pay?

Your SMSF’s tax rate depends on its phase. In the accumulation phase, most funds pay 15% on income such as investment earnings, capital gains, and concessional contributions. In retirement phase, eligible pension income is taxed at 0%. If your fund has both phases in the same year, an actuary certificate determines the ECPI percentage so only the taxable proportion is taxed.

Do SMSFs get a capital gains tax discount?

Yes. If your SMSF holds an asset for more than 12 months while in accumulation phase, it may qualify for a one-third CGT discount, reducing the effective rate on those gains to 10%. If the gains relate to assets supporting pension accounts and meet ECPI rules, they may be fully exempt from CGT.

Why can new contributions affect a pension-phase fund’s tax status?

When it comes to superannuation, contributions and rollovers can’t be added directly into an existing pension account. They must go into accumulation first, which can stop the fund being 100% tax-free for that year. To preserve tax-free status where possible, trustees may need strategies like starting a new pension account or withdrawing contributions (if a condition of release is met), but these must be done correctly with an SMSF accountant.

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Disclaimer: This article contains general information only and does not take into account your personal objectives, financial situation, or needs. It is not a substitute for financial, taxation, or legal advice. While care has been taken to ensure the information is accurate at the time of publication, superannuation and tax laws are complex, can change, and apply differently depending on individual circumstances. SMSFs are subject to strict compliance requirements, and mistakes can result in penalties or additional tax. You should seek advice from a suitably qualified and registered professional before acting on this information.