Division 293 Tax Explained: How Extra Super Tax Works in Australia (2026 Guide)
๐ก Division 293 Tax on Concessional Contributions (Australia 2026 Guide)
If your income and concessional super contributions exceed $250,000, you may be required to pay Division 293 tax.
This additional tax reduces the concessional tax benefits on super contributions for high-income earners and is strictly monitored by the Australian Taxation Office (ATO).
๐ About Division 293 Tax
Division 293 tax is an additional 15% tax applied to concessional super contributions when your combined income and contributions exceed $250,000.
๐ It is calculated as:
15% of the lesser of:
- The amount above $250,000 threshold
- OR your concessional super contributions
๐ฉ How You Will Know If You Need to Pay
The ATO will issue a Division 293 Notice of Assessment after receiving:
โ๏ธ Your income tax return
โ๏ธ Contribution data from your super fund
๐ If you lodge via myTax, the notice will appear in your myGov inbox
๐ You can redirect it to your tax agent if required
๐งพ When Preparing Your Tax Return
If your income indicates you may exceed the threshold:
๐ The ATO may notify you during tax return preparation
โ ๏ธ Final assessment is only issued once super contribution data is received
โ ๏ธ If You Believe Your Assessment Is Incorrect
Check:
โ๏ธ Income details
โ๏ธ Super contributions reported
If incorrect:
๐ Update your tax return OR contact your super fund
If still unresolved:
๐ You can lodge a formal objection
๐ฐ How to Pay Division 293 Tax
You can pay:
โ๏ธ From personal funds
โ๏ธ By releasing money from super
๐ Pay by due date to avoid interest charges
๐ How Division 293 Tax Is Calculated
ATO uses:
โ๏ธ Your tax return โ to calculate income
โ๏ธ Super fund data โ to calculate contributions
๐ If multiple funds report later โ amended assessment may be issued
โ๏ธ When Division 293 Applies
You must have:
โ๏ธ Concessional contributions (SG, salary sacrifice, personal deductible contributions)
โ๏ธ Total income + contributions exceeding $250,000
๐ Example
Income = $240,000
Super contributions = $15,000
Total = $255,000
๐ Excess = $5,000
๐ Tax payable = 15% of $5,000 = $750
๐ Division 293 Income (Important)
Based on Medicare Levy Surcharge (MLS) calculation:
Includes:
โ๏ธ Taxable income
โ๏ธ Fringe benefits
โ๏ธ Investment losses
โ๏ธ Rental losses
โ๏ธ Trust distribution tax amounts
Adjustments:
โ Some super lump sums
โ First Home Super Saver released amounts
โ ๏ธ One-Off Events That Trigger Division 293
Even if normally below threshold, you may be impacted by:
โ๏ธ Capital gains
โ๏ธ Back payments
โ๏ธ Termination payments
โ๏ธ Sudden income increases
๐ Division 293 Super Contributions
Includes concessional contributions:
โ๏ธ Employer super (SG)
โ๏ธ Salary sacrifice
โ๏ธ Personal deductible contributions
๐ Carry-forward contributions are also included
๐ Taxable Super Contributions
๐ Calculated as the lesser of:
Total contributions
Amount exceeding threshold
๐ซ No Discretion Rule
Unlike excess contributions:
๐ ATO cannot reallocate or ignore contributions for Division 293
๐ฆ Division 293 for Defined Benefit Members
โ๏ธ Contributions are calculated based on annual benefit growth
โ๏ธ Tax liability may be deferred
๐ Deferred Debt Rules
โ๏ธ Separate debt account created
โ๏ธ Interest applies if unpaid
โ๏ธ Payable when benefit is released
โ ๏ธ End Benefit Rules
When super benefit is paid:
๐ Debt becomes payable within 21 days
Certain payments excluded:
โ๏ธ Rollovers
โ๏ธ Hardship withdrawals
โ๏ธ Compassionate releases
๐ Higher-Level Office Holders (Special Rules)
Certain state officials and judges may be exempt when contributing to:
๐ Constitutionally Protected Funds (CPFs)
๐ Refund for Former Temporary Residents
You may claim a refund if:
โ๏ธ You received a departing super payment
โ๏ธ You apply in approved form
๐ SG Amnesty Contributions
โ๏ธ Do NOT count for Division 293
โ๏ธ Already excluded in most ATO calculations
๐ธ Releasing Money from Super
You can elect to pay tax using super funds:
โ๏ธ Election must be made within 60 days
โ๏ธ Does NOT extend payment due date
โ๏ธ ATO sends release authority to fund
โ ๏ธ Election cannot be reversed
๐จ Why Division 293 Matters
โ Reduces tax benefits on super
โ Impacts high-income earners
โ Can apply unexpectedly due to one-off income
๐ Final Takeaway
๐ Division 293 ensures high-income earners pay fair tax on super contributions
๐ Understanding your position helps avoid surprises and manage tax effectively
๐ค How Supertax Helps
At Supertax, we simplify complex tax rules:
โ๏ธ Income & contribution analysis
โ๏ธ Division 293 impact planning
โ๏ธ Tax return accuracy
โ๏ธ Super contribution strategy
โ๏ธ ATO compliance support
๐ Helping you stay compliant while optimising your tax position
๐ ๐๐๐๐๐๐๐ ๐๐๐๐๐๐๐๐
๐ Website: https://supertax.com.au/
๐ Suite 1, 7 Bridge St, Werribee VIC 3030
๐ (03) 7074 8818
๐ง info@supertax.com.au
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