What Is Division 293 Tax?
Division 293 is an additional 15% tax on concessional (before-tax) superannuation contributions for individuals whose combined income and concessional super contributions exceed $250,000 in a financial year.
Concessional super contributions are normally taxed at just 15% inside your super fund, compared to your marginal tax rate of up to 45% on regular income. Division 293 adds another 15%, bringing the total tax on super contributions to 30% for high-income earners. This partially closes the tax advantage that higher earners receive from the concessional super tax rate.
The $250,000 threshold was reduced from $300,000 on 1 July 2017. It is not indexed, meaning bracket creep gradually draws more taxpayers into Division 293 each year.
Who Is Affected?
Division 293 primarily impacts high-income professionals, executives, and business owners. An employee earning $230,000 with $30,000 in concessional contributions (12% employer SG of $27,600 plus $2,400 salary sacrifice) has a combined income of $260,000 — triggering Division 293 on $10,000 of their super contributions.
How Is Division 293 Tax Calculated?
The ATO calculates Division 293 tax after you lodge your tax return. The formula considers two key amounts:
- Income for Division 293 purposes — This includes your taxable income, reportable fringe benefits, and total net investment losses (similar to MLS income).
- Low-tax contributed amounts — Your concessional (before-tax) super contributions, including employer SG, salary sacrifice, and personal deductible contributions.
The additional 15% tax applies to the lesser of:
- Your total concessional super contributions, or
- The amount by which your income + super exceeds $250,000
Worked Examples
| Scenario | Taxable Income | Super Contributions | Combined | Div 293 Tax |
|---|---|---|---|---|
| Example A | $260,000 | $30,000 | $290,000 | $4,500 |
| Example B | $300,000 | $30,000 | $330,000 | $4,500 |
| Example C | $245,000 | $30,000 | $275,000 | $3,750 |
| Example D | $350,000 | $30,000 | $380,000 | $4,500 |
Example A explained: Taxable income of $260,000 plus $30,000 super = $290,000. The excess over $250,000 is $40,000. The lesser of $40,000 (excess) and $30,000 (contributions) is $30,000. Division 293 tax = $30,000 x 15% = $4,500.
Example C explained: Taxable income of $245,000 plus $30,000 super = $275,000. The excess over $250,000 is $25,000. The lesser of $25,000 (excess) and $30,000 (contributions) is $25,000. Division 293 tax = $25,000 x 15% = $3,750.
How to Pay Division 293 Tax
After you lodge your tax return, the ATO will issue a Division 293 tax assessment notice if you are liable. You then have two options for paying the tax:
Option 1: Pay From Your Super Fund
You can elect to release money from your super fund to pay the Division 293 tax. The ATO will send you a release authority, which you sign and return within 60 days. The ATO then contacts your super fund to release the amount. This is the most common option as it preserves your personal cash flow.
Option 2: Pay From Personal Funds
You can pay the Division 293 assessment directly using BPAY, credit card, or direct debit, just like any other ATO debt. The due date is shown on your assessment notice, typically 21 days from the date of issue. Paying from personal funds preserves your super balance but reduces your available cash.
Tip
Releasing the amount from super is your choice: you can elect to have it paid from your super fund, or pay it yourself. If you don't pay by the due date on the notice, general interest charge applies. Set a reminder when you receive the assessment so you decide before the due date.
Strategies to Manage Division 293
While Division 293 cannot be avoided if your income exceeds the threshold, there are strategies to manage its impact:
Reduce Concessional Contributions
If your income alone exceeds $250,000, your mandatory employer SG contributions will trigger Division 293 regardless. However, you can choose not to make additional salary sacrifice contributions to limit the amount subject to the extra tax. The trade-off is losing the tax-advantaged super growth.
Consider Non-Concessional Contributions
Non-concessional (after-tax) contributions do not count towards Division 293 income. If you want to boost your super balance without triggering additional Division 293 tax, after-tax contributions (up to the $130,000 annual cap in FY2026-27) are an alternative. These contributions enter your super fund tax-free.
Timing of Income
If you have discretionary income (e.g., from a business or investments), timing the realisation of capital gains or business profits can help manage whether you cross the $250,000 threshold in a given year. This requires careful planning with a qualified tax adviser.
Despite Division 293, Super Is Still Tax-Effective
Even with Division 293, the total tax on super contributions is 30% — still lower than the top marginal rate of 45% (plus 2% Medicare levy = 47%). For someone in the top tax bracket, super contributions still save 17% compared to taking the money as salary. Use our Salary Sacrifice Calculator to model the net benefit.
Frequently Asked Questions
About this guide▼
Division 293 thresholds and calculations are sourced from the Australian Taxation Office. Worked examples assume $30,000 of concessional contributions, within the FY2026-27 cap of $32,500, and the 12% SG rate. Individual circumstances vary based on reportable fringe benefits, investment losses, and multiple super fund arrangements. Consult a qualified tax adviser for personalised Division 293 planning.
Sources & References
- 1Division 293 tax— Australian Taxation Office
- 2Concessional contributions cap— Australian Taxation Office
- 3Super guarantee rate— Australian Taxation Office
Last verified: 9 October 2026. Our content is based on the latest information from official Australian government sources.
Anita Bell
AuthorFounder & Senior Bookkeeper
Accountancy degree (2015); certified in Xero, QuickBooks Online, MYOB, Saasu, Zoho and Reckon One
Anita Bell earned her accountancy degree in 2015 and has worked as a senior bookkeeper with Prime Bookkeeping for over 5 years. This built her skills in Australian and New Zealand tax legislation and industry regulations. She is certified in Xero, QuickBooks Online, MYOB, Saasu, Zoho and Reckon One, and works with payroll and rostering software including Gusto, Deputy, Tsheets and KeyPay. She has strong experience in hospitality, building and construction, financial services, real estate, ecommerce, and medical and health services.
Areas of Expertise