Merging super accounts in Australia may trigger large tax bills if one has untaxed contributions, like from government jobs or insurance payouts.

Consolidating superannuation accounts in Australia can trigger a significant tax bill if one account contains an untaxed component, such as from government employment or insurance payouts. A recent case involved an $18,500 tax on $123,000 transferred, as untaxed contributions haven’t had the usual 15% tax applied and must be taxed upon rollover. While the lack of prior warning is problematic, the tax is unavoidable over time. Experts advise reviewing super accounts for untaxed components before merging funds to avoid surprises.