Division 293 tax is an additional 15% tax on concessional superannuation contributions for high-income earners in Australia. This article explains who it affects, how it's calculated, and how to manage your obligations efficiently.
What is Division 293 Tax?
Division 293 tax is an additional 15% tax applied to concessional superannuation contributions for individuals whose income and super contributions exceed $250,000 in a financial year. It is designed to reduce the tax concession imbalance between high and low-income earners.
How Does Division 293 Tax Work?
You may be liable for Division 293 tax if your:
- Income (from salary, investments, redundancy, or other taxable sources), and
- Concessional Contributions (CCs) (including employer contributions and salary sacrifice)
combined exceed $250,000.
The additional 15% tax applies to the portion of concessional contributions above that threshold.
This is on top of the standard 15% tax your super fund already pays on those contributions.
Why it's still worth contributing:
Even if you pay 30% tax on concessional contributions (15% standard + 15% Division 293), it's still lower than the top marginal tax rate of 47% (including Medicare Levy).
How Is Division 293 Tax Assessed?
The Australian Taxation Office (ATO) determines your Division 293 liability using:
- Your individual tax return
- Data from your superannuation fund(s)
If you're liable, the ATO will send you a Division 293 Notice of Assessment detailing the amount and how to pay it.
You can pay:
- From your personal savings, or
- By using the ATO’s release authority to withdraw from your super fund
Case Study: Who Pays and Who Doesn’t?
Example 1: Bob – Not Liable
- Salary: $200,000
- Employer Super Contribution: $24,000
- Total for Div 293 Purposes: $224,000
- Outcome: Under $250,000 → No Division 293 tax
- Tax on Super Contributions: 15% only
Example 2: Mary – Liable
- Salary: $250,000
- Employer Contributions: $30,000
- Total for Div 293 Purposes: $280,000
- Outcome: Over $250,000 → Entire $30,000 subject to additional 15% tax
- Total Tax on Contributions: 15% + 15% = 30%
- Payment Method: Pay from savings or release from super
Defined Benefit Funds
Special rules apply for those in defined benefit super funds. For more information, visit the ATO website: 👉 [https://www.ato.gov.au]
Related Topics
- Division 296 – Superannuation Taxation Changes
- Division 293 Threshold
- Div 293 Tax Assessment
- What is Division 293 Tax