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Plain-English Explainer

Division 293 tax explained: the extra 15% on super contributions for higher earners

A plain-English explainer of Division 293 tax — the additional 15% tax on concessional super contributions where combined income and contributions exceed $250,000 — covering who it catches, how the ATO calculates and assesses it, and the payment and release-from-super options.

Published Sources verified 8 min read

Applies to: Threshold and mechanics current at 12 July 2026; concessional cap figures cover 2024–25 to 2026–27; Division 296 comparison reflects law applying from 1 July 2026 · Australia

The direct answer

Division 293 tax is an extra 15% tax on some or all of your concessional (before-tax) super contributions, payable when your combined income and concessional contributions for Division 293 purposes exceed $250,000 in an income year. The ATO assesses it automatically once it has your tax return and your fund’s contribution reporting; you can pay it with your own money or elect, within 60 days of the assessment, to release the amount from super.

Key points

  • Division 293 tax applies when combined Division 293 income plus concessional super contributions exceed $250,000 — a threshold that has applied since 2017–18 and remains current as at 12 July 2026, per the ATO’s key super rates.
  • The 15% tax applies only to the lesser of your concessional contributions or the amount by which you exceed $250,000 — someone just over the threshold pays Division 293 tax on only a small slice of contributions.
  • For the contributions caught, the combined effect is 30% — the standard 15% contributions tax paid by the fund plus the 15% Division 293 tax. The law is titled “Sustaining the superannuation contribution concession”: it reduces, rather than removes, the concession.
  • Division 293 income is broader than taxable income: it adds back reportable fringe benefits and net financial investment and rental property losses, so negative-gearing losses cannot reduce it, and one-off events like a capital gain, termination payment or back pay can trigger the tax in a single year.
  • There is nothing extra to lodge — the ATO issues a Division 293 notice of assessment automatically, and the tax is due 21 days after the notice under section 293-65 of the Income Tax Assessment Act 1997.
  • You can elect within 60 days of the assessment to release the amount from super via an ATO release authority — but the election cannot be withdrawn or reversed, and it does not extend the payment due date.
  • Excess concessional contributions are excluded from the Division 293 calculation, but contributions covered by carry-forward (catch-up) cap amounts are all counted — relevant now the general concessional cap is $32,500 for 2026–27.

What Division 293 tax is

Division 293 tax is an additional tax on super contributions that reduces the tax concession for people whose combined income and concessional contributions for Division 293 purposes exceed $250,000 in an income year. It is charged at 15% of the excess over the threshold or the taxable super contributions, whichever is less. The rules sit in Division 293 of the Income Tax Assessment Act 1997, titled “Sustaining the superannuation contribution concession” — the intent is to reduce, not remove, the concession higher earners receive.

Concessional contributions are ordinarily taxed at 15% inside the fund, paid by the fund from the contribution. Division 293 adds a further 15% on the affected slice, so those contributions bear an effective 30% in total. Everything below the threshold, and every dollar of contributions not caught by the lesser-of calculation, keeps the standard treatment.

Note

There is nothing extra to lodge. The ATO works out any Division 293 liability from your tax return and your fund’s contribution reporting, and sends a separate notice of assessment if tax is payable.

Who pays it — the $250,000 threshold

Division 293 threshold by income year (ATO key super rates, current at 12 July 2026)
Income yearsThreshold
2012–13 to 2016–17$300,000
2017–18 onwards, including 2025–26$250,000

The threshold has remained $250,000 since 2017–18 and is not indexed annually in the way the concessional cap is. Whether it changes in future is a matter for Parliament — as at 12 July 2026, no change to the threshold or to the 15% rate has been enacted, and none was found to be formally proposed.

You do not need a permanently high income to be caught. The ATO notes that one-off events can push a person over the threshold for a single year — for example an eligible termination payment, back payment of salary or wages, a capital gain, or another income increase. Because Division 293 is worked out year by year, a one-off spike creates a liability for that year only.

What counts: Division 293 income and contributions

Division 293 income is based on the same income calculation used for the Medicare levy surcharge, disregarding reportable super contributions. It is deliberately broader than taxable income, so deductions like negative-gearing losses cannot pull you under the threshold.

Components of Division 293 income (ATO guidance, updated 8 December 2025)
AddedSubtracted
Taxable income (assessable income minus allowable deductions)Super lump sum taxed elements with a zero tax rate
Total reportable fringe benefits amountsAssessable First Home Super Saver released amounts
Net financial investment loss
Net rental property loss
Net amount on which family trust distribution tax has been paid

Division 293 super contributions are your concessional contributions — employer contributions including super guarantee, salary sacrifice, and personal contributions you claim as a deduction — plus certain roll-over super benefits. Excess concessional contributions are disregarded (they are taxed under the separate excess rules), but if your cap has been increased by carry-forward amounts, all contributions within the higher cap are counted.

Important

The ATO has no discretion to disregard or reallocate contributions for the Division 293 calculation. Even where the ATO agrees to disregard or reallocate excess concessional contributions to another year, those amounts retain concessional treatment and are added back into the Division 293 calculation.

How the tax is calculated — the lesser-of rule

The taxable super contributions — the amount actually taxed at 15% — are the lesser of your Division 293 super contributions and the amount by which your combined income and contributions exceed $250,000. Two consequences follow: if only your contributions tip you over the line, only the portion above the threshold is taxed; and the tax can never exceed 15% of your Division 293 super contributions for the year.

The ATO’s published example

Division 293 income of $240,000 plus Division 293 super contributions of $15,000 gives a combined $255,000 — $5,000 over the threshold. The taxable super contributions are the lesser of $15,000 and $5,000, so Division 293 tax is 15% of $5,000 = $750.

Because contributions themselves count towards the $250,000 test, the concessional cap matters here: the general cap is $32,500 for 2026–27, after $30,000 in 2024–25 and 2025–26 and $27,500 from 2021–22 to 2023–24. Our contribution caps resource covers the caps in detail, and individual tax rates 2026–27 shows the marginal rates that sit alongside these rules.

Assessment, payment and releasing money from super

How a Division 293 assessment plays out

  1. The ATO gathers both data sets. A Division 293 notice of assessment issues only once the ATO has your lodged income tax return and the contribution information reported by your super fund. If a second fund reports contributions after you lodge, an amended Division 293 assessment may issue.
  2. The notice arrives. If you lodge through myTax, the notice is delivered to your myGov inbox unless your communication preferences direct it to your registered tax agent.
  3. Payment falls due 21 days later. Under section 293-65 of the Income Tax Assessment Act 1997, assessed Division 293 tax is due and payable 21 days after the Commissioner gives notice of the assessment (amounts deferred to a defined benefit debt account excepted). Work from the due date shown on your notice.
  4. Choose how to pay. You can pay with your own money, or elect to release the amount from super. The election must be made within 60 days of the date of the assessment — online via ATO online services (Super, then Manage, then Division 293 election) or through your tax agent.
  5. If you elect, a release authority issues. The ATO sends your nominated fund a release authority; the fund pays the amount directly to the ATO, which applies it to the Division 293 liability, then to any other tax and Australian Government debts, before refunding any balance to you.

Important

Two ATO cautions on the release election: once made, it cannot be withdrawn or reversed, and the 60-day election window does not extend the payment due date on your notice. Releasing money from super is a significant decision — this resource describes the mechanics without recommending either payment method.

Defined benefit members and other special rules

For defined benefit interests, Division 293 tax attributed to defined benefit contributions is deferred to a debt account rather than being payable within 21 days. The deferred amount generally becomes payable only when an end benefit is paid from that interest; the final debt account discharge liability is capped at the end benefit cap calculated by the fund, and is due 21 days after the day the benefit is paid. Deferred debts unpaid at 30 June attract end-of-year interest at the average 10-year Treasury bond rate — 4.2906% for 2024–25, the latest rate published at the verification date.

Not every payment out of a defined benefit account triggers the debt: rollovers to a successor fund on merger, severe financial hardship payments, compassionate grounds releases and family law super payments are not end benefits.

  • State higher-level office holders — exempt for certain (non-salary-packaged) contributions to constitutionally protected funds.
  • Commonwealth judges — exempt for contributions to funds established under the Judges’ Pensions Act 1968.
  • Former temporary residents — those who received a departing Australia superannuation payment can apply for a refund of Division 293 tax paid.
  • Super guarantee amnesty contributions — do not count towards Division 293 income or contributions.

Division 293 vs the new Division 296 tax

Division 293 is sometimes confused with Division 296 — the “better targeted superannuation concessions” measure, which is now enacted law under the Treasury Laws Amendment (Building a Stronger and Fairer Super System) Act 2026 and its Imposition Act. They are separate taxes on different bases, and a person can be affected by one, both or neither. The comparison below exists only to keep the two apart; our Division 296 status resource covers that measure in full.

Division 293 and Division 296 compared (current at 12 July 2026)
Division 293Division 296
What is taxedConcessional super contributions (the taxable slice)The proportion of super earnings attributable to the excess over the large balance threshold
TriggerCombined Division 293 income and concessional contributions over $250,000Total super balance above $3 million (2026–27)
Rate15% extra on the taxable contributions15% extra; a further 10% on the proportion above the very large balance threshold of $10 million (2026–27)
IndexationThreshold unchanged since 2017–18; not indexed annually like the capsBoth thresholds indexed to CPI
StatusEnacted, operative since 2012–13Enacted; applies from 1 July 2026 (the 2026–27 year)

Hypothetical example — a one-off capital gain year

Hypothetical example only — invented figures, not a client outcome and not advice. Suppose Priya, a hypothetical taxpayer, has Division 293 income of $235,000 in the 2026–27 income year — higher than usual because of a capital gain on shares — and concessional super contributions of $30,000, within the $32,500 general concessional cap for 2026–27. Her combined income and contributions are $265,000, which is $15,000 over the $250,000 threshold. Her taxable super contributions are the lesser of her $30,000 contributions and the $15,000 excess — so $15,000 — and her Division 293 tax is 15% of $15,000 = $2,250. After she lodges her return and her fund reports her contributions, the ATO issues a Division 293 notice of assessment. The tax is due 21 days after the notice; she can pay it personally or elect within 60 days of the assessment to release the amount from super, remembering the election is irreversible and does not move the due date. The method follows the ATO’s published Division 293 guidance.

This example is entirely hypothetical and illustrates the mechanics only. It is not a client outcome, a prediction, or advice.

Limitations of this information

  • This is general information only, based on ATO guidance and legislation current at 12 July 2026 — it does not consider your objectives, financial situation or needs, and is not a recommendation to pay a Division 293 liability personally or from super.
  • The treatment of roll-over superannuation benefits counted as Division 293 contributions is described only in general terms here; the detail depends on the components of the specific rollover.
  • Due dates printed on individual Division 293 notices reflect ATO processing — this resource states the statutory 21-day rule, but always work from the due date shown on your own notice.
  • The end-of-year interest rate on deferred defined benefit debt accounts for 2025–26 had not been published at the verification date; the 4.2906% figure quoted is the 2024–25 rate.
  • Division 293 tax cannot be “opted out of” — this resource describes the ATO’s published rules and payment options only, and does not suggest ways to avoid the tax.

Practical next steps

  1. If your income this year includes a capital gain, termination payment or significant back pay, check whether your combined income and concessional contributions may exceed $250,000 so the assessment does not arrive as a surprise.
  2. When a Division 293 notice arrives, diarise two dates immediately: the payment due date on the notice, and the 60-day election deadline if you are considering releasing money from super.
  3. Confirm your ATO communication preferences so the notice reaches you (myGov) or your tax agent as intended.
  4. To factor Division 293 into your broader position for the year, talk to our tax planning team; SMSF members can also raise contribution reporting with our SMSF compliance service or contact the practice.

Frequently asked questions

The threshold is $250,000 and has applied since the 2017–18 income year (it was $300,000 from 2012–13 to 2016–17). Your Division 293 income and your concessional super contributions are added together and compared against it. Unlike the contribution caps, the threshold is not indexed annually — it has remained $250,000 since 2017–18 and is still current as at 12 July 2026.

Official sources

The facts in this resource are drawn from the following official sources, each read on the date shown. If a source has changed since, the source prevails.

Discuss your situation with us

This resource is general information for Australian residents, not tax advice. It does not consider your circumstances, and tax outcomes depend on individual facts. Speak to a registered tax agent before acting. It is also not financial product advice — we are not an Australian financial services licensee. Decisions about superannuation or other financial products should be discussed with a licensed financial adviser.

Last verified against official sources: · Next scheduled review by 12 October 2026 · Update sensitivity: high

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