Division 293 Tax

Division 293 tax is an additional 15% tax on some or all of your concessional super contributions if your income plus concessional contributions exceeds $250,000. This brings the effective tax rate on those contributions to 30% (the standard 15% contributions tax plus the 15% Division 293 tax), reducing the tax concession available to higher-income earners.

The Division 293 income threshold is $250,000, calculated as taxable income plus net investment losses, reportable fringe benefits, and low-tax contributed amounts (concessional super contributions). If your income exceeds $250,000 before adding super, all your concessional contributions are subject to Division 293 tax. If your income is below $250,000 but exceeds it when super is added, only the amount above $250,000 is subject to the additional tax.

The ATO issues a Division 293 tax assessment after your tax return is processed. You can choose to pay it personally or have it released from your super fund. If you don't make a choice within the required timeframe, the ATO will direct your super fund to pay it. Even with Division 293, the 30% rate is still lower than the top marginal rate of 45% plus Medicare levy, so there is still a tax benefit to making concessional super contributions for high earners.