Model the Division 296 tax under the passed law (effective 1 July 2026). Two-tier rates on realised earnings attributable to TSB above $3M and $10M.
Effective 1 July 2026Realised earnings onlyCPI-indexed thresholds
01 —INPUTS
Division 296 took effect 1 July 2026 under the passed law.
Your Total Super Balance at 30 June — used to determine proportions above the $3M and $10M thresholds.
Dividends, interest, rent, and realised capital gains for the year. Unrealised gains are excluded under the passed law. Pre-1-July-2025 gains are also grandfathered out.
Your personal taxable income — used for marginal-rate comparison.
02 —RESULTS
Enter your closing super balance and realised earnings for the year to estimate Division 296 tax.
FAQ
What is Division 296 tax and when does it start?
Division 296 is an additional tax on super earnings attributable to high Total Super Balances (TSB). The Treasury Laws Amendment (Building a Stronger and Fairer Super System) Act 2026 passed the Senate on 10 March 2026 and takes effect 1 July 2026. The first assessment is based on TSB at 30 June 2027 and will be issued by the ATO during the 2026-27 financial year.
What are the thresholds and rates?
Two tiers apply. For TSB between $3 million and $10 million, an additional 15% Div 296 tax applies to realised earnings attributable to that slice — bringing the total tax on that slice to 30% (base 15% + Div 296 15%). For TSB above $10 million, an additional 25% applies — bringing the total to 40%. Both thresholds are CPI-indexed: the $3M threshold rises in $150,000 steps and the $10M threshold in $500,000 steps.
How are earnings calculated under the passed Act?
Earnings for Division 296 are 'realised earnings' — dividends, interest, rent, and realised capital gains net of realised losses. Unrealised capital gains are excluded. This was a material design amendment from the original 2023-2025 draft, which had proposed taxing notional (unrealised) earnings. Capital gains accrued before 1 July 2025 are grandfathered out of the calculation.
How is the tax attributed to the thresholds?
The ATO calculates the proportion of your TSB above each threshold, applies that proportion to your realised earnings, and taxes the assessable amount at the tier rate. For a TSB of $15M with $900k realised earnings: the $3M–$10M slice ($7M) is 7/15 of TSB → $420k assessable at 15% = $63k; the above-$10M slice ($5M) is 5/15 of TSB → $300k assessable at 25% = $75k; total Div 296 tax = $138k.
What if my super balance drops below $3M during the year?
Division 296 is tested on the 30 June closing balance. If your closing TSB is at or below $3 million, no Div 296 tax applies for that year regardless of intra-year values. The first-year transitional rule uses the 30 June 2027 balance (closing) as the reference.
Can Division 296 tax be negative (a refund)?
No. If your realised earnings are zero or negative for the year, no Div 296 tax applies. Negative earnings can be carried forward to offset future Div 296 assessments in subsequent years.
Is super still worth it with Division 296?
For most members, yes. Even at the 40% total rate on the >$10M tier, super's effective rate on realised earnings typically stays below the top personal marginal rate of 47% (45% + 2% Medicare). Super also offers tax-free pension-phase income for members aged 60+. The calculator's comparison table shows your specific in-super vs personal-rate position.
Does Division 296 apply to all types of super funds?
Yes — retail, industry, SMSFs, and defined benefit funds. Defined benefit interests use a commensurate methodology for calculating notional earnings. Members with large SMSFs holding illiquid assets (property, unlisted shares) need to plan liquidity carefully, since Div 296 tax is payable in cash even if the underlying earnings are not distributed.
How can I reduce my Division 296 exposure?
Common planning levers: withdrawing to keep TSB under $3M (if eligible — pension-phase withdrawals are generally tax-free at 60+); spouse splitting to use both thresholds; reviewing contribution levels near the threshold; and timing of realisations inside the fund. Withdrawals that would push the balance below $3M should be weighed against the opportunity cost of foregone concessionally-taxed earnings. Professional advice is warranted for anyone within $1M of either threshold.
This calculator uses the two-tier Division 296 rules as enacted by the Treasury Laws Amendment (Building a Stronger and Fairer Super System) Act 2026 (effective 1 July 2026). It does not account for defined benefit fund commensurate methodology, carried-forward negative earnings from prior years, interaction with transition-to-retirement pensions, or pre-1-July-2025 grandfathered capital gains (users should exclude grandfathered gains from their realised-earnings input).