Taxable Component

The taxable component is the portion of your super balance built from concessional (pre-tax) contributions and the fund's investment earnings. When a death benefit is paid, this component can attract death benefits tax if it goes to someone who is not a tax dependant. It contrasts with the tax-free component, which is never taxed, and understanding the split helps you estimate what a beneficiary will actually keep.

The taxable component is what drives most super death-benefit tax bills, so it is central to planning who receives your super. Example: Dev's $600,000 super was 90% taxable component, so leaving it to his independent adult son triggered roughly $90,000 in tax that would not have applied had it gone to his spouse. A "recontribution strategy" while alive can convert taxable to tax-free component, but it needs professional advice.