Quick Summary
- •Division 293 is an additional 15% tax on super contributions for high-income earners
- •Applies when your income + super contributions exceeds $250,000
- •Only applies to concessional (before-tax) contributions
- •Increases your effective tax rate on super from 15% to 30%
- •You'll receive an assessment from the ATO after lodging your tax return
In This Guide
What is Division 293 Tax?
Division 293 tax is an additional 15% tax on superannuation contributions for individuals whose combined income and super contributions exceed $250,000. It was introduced by the Australian Government to ensure that high-income earners don't receive a disproportionate tax benefit from the concessional (15%) tax rate on super contributions.
Without Division 293, a person earning $300,000 (taxed at 45% marginal rate) would save 30 cents in the dollar by salary sacrificing into super (45% - 15% = 30%). Division 293 reduces this advantage to 15 cents, making the benefit more comparable to what lower-income earners receive.
Note: The $250,000 threshold has been in effect since 1 July 2017. Prior to this, the threshold was $300,000.
Who Pays Division 293 Tax?
You may be liable for Division 293 tax if your "Division 293 income" exceeds $250,000. Your Division 293 income includes:
Division 293 Income Includes:
- +Taxable income (salary, wages, business income, investments)
- +Reportable fringe benefits (shown on your payment summary)
- +Total net investment losses (e.g., negative gearing losses)
- +Taxable concessional super contributions
- +Assessable First Home Super Saver amounts
Example: If your salary is $240,000 and you have $15,000 in employer super contributions, your Division 293 income is $255,000 — above the threshold. You'd pay Division 293 tax on $5,000 worth of contributions.
How is Division 293 Calculated?
Division 293 tax is calculated on the lesser of:
Your taxable concessional contributions (employer + salary sacrifice + personal deductible contributions)
The amount by which your Division 293 income exceeds $250,000
The Formula
Division 293 Tax = 15% × min(Concessional Contributions, Income + Super - $250,000)
This means if you're only slightly over the threshold, you won't pay Division 293 on all your contributions — only on the portion that pushed you over.
Division 293 Examples
Here are practical examples showing how Division 293 tax works at different income levels (assuming 11.5% super guarantee):
| Salary | Super (11.5%) | Div 293 Income | Div 293 Tax | Effective Rate |
|---|---|---|---|---|
| $200,000 | $23,000 | $223,000 | $0 | 15% |
| $260,000 | $29,900 | $289,900Above threshold | $4,485 | 30% |
| $300,000 | $34,500 | $334,500Above threshold | $5,175 | 30% |
| $400,000 | $46,000 | $446,000Above threshold | $4,575 | 30% |
Worked Example: $260,000 Salary
What Contributions are Included?
Included (Concessional)
- ✓Employer super guarantee contributions
- ✓Salary sacrifice contributions
- ✓Personal contributions claimed as a tax deduction
- ✓Defined benefit contributions (notional amount)
Not Included (Non-concessional)
- ✗Personal after-tax contributions (not claimed)
- ✗Spouse contributions
- ✗Government co-contributions
- ✗CGT cap contributions
Concessional contributions cap: For 2024-25, the concessional contributions cap is $30,000 per year. If you exceed this cap, the excess is taxed at your marginal rate (not just 15% + 15%).
How and When to Pay
You don't need to calculate or pay Division 293 tax yourself during the year. Here's how the process works:
Lodge your tax return
Submit your tax return as usual. The ATO will calculate your Division 293 liability.
Receive your assessment
The ATO will issue a Division 293 tax assessment notice, separate from your income tax assessment.
Choose how to pay
You can pay from your super fund (release authority) or from your personal funds within 21 days.
Payment Options
Strategies to Minimise Division 293
While Division 293 can't be completely avoided if you're over the threshold, there are some strategies to consider:
1. Consider Non-Concessional Contributions
If you're well over the threshold, non-concessional (after-tax) contributions aren't subject to Division 293. While you don't get an upfront tax deduction, the earnings in super are still taxed at just 15%.
2. Timing of Deductible Expenses
If you're close to the $250,000 threshold, legitimate tax deductions (work expenses, investment property costs) can reduce your Division 293 income below the threshold.
3. Spouse Contribution Splitting
You can split up to 85% of your concessional contributions to your spouse's super (if they're under preservation age or between preservation age and 65 and not retired). This doesn't reduce your Division 293 liability but can help with other planning.
4. It's Still Worth Contributing
Even with Division 293, super contributions are still tax-effective. At a 45% marginal rate, you're saving 15% tax (45% - 30% = 15%) on contributions. Plus, earnings in super are taxed at just 15% (or 0% in pension phase).
Important: These strategies should be discussed with a qualified financial adviser or tax accountant. Personal circumstances vary, and what works for one person may not be optimal for another.
Frequently Asked Questions
Is Division 293 tax deductible?
No, Division 293 tax is not tax deductible. However, if you pay it from your super fund, it reduces your super balance, which could have minor flow-on effects.
Does Division 293 apply to defined benefit schemes?
Yes. For defined benefit funds, the ATO calculates a "notional taxed contribution" amount, which is then used for Division 293 purposes. This can be complex, so check with your fund administrator.
What if I have multiple super funds?
The ATO will send the release authority to your nominated super fund. If you don't nominate one, they'll send it to the fund that received the most recent contribution. You can elect which fund pays if you have multiple.
Can I carry forward unused cap amounts to avoid Division 293?
You can carry forward unused concessional cap amounts from previous years to make larger contributions. However, this doesn't help you avoid Division 293 — it's based on your income level, not how much you contribute.
What happens if my income drops below $250,000 next year?
Division 293 is assessed annually. If your Division 293 income is below $250,000 in a future year, you won't be liable for the additional 15% tax that year, regardless of previous years.
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This guide provides general information only and is not financial or tax advice. Division 293 rules are sourced from the Australian Taxation Office (ATO). Please consult a registered tax agent for advice specific to your circumstances.
Last updated: February 2026