Division 293 Tax Calculator Australia 2025-26

What Is Division 293 Tax?

Division 293 tax is an additional superannuation tax that applies to high-income earners in Australia. It was introduced to reduce the tax advantage that high-income individuals received from the standard 15% concessional contributions tax rate. When someone earns $300,000 a year, paying only 15% tax on their $27,500 super contributions represents a much larger tax saving than for someone on a $60,000 salary who would otherwise pay 19%–32.5% marginal tax. Division 293 corrects this by charging an additional 15% on contributions for incomes above $250,000 — bringing the effective rate to 30%.

The tax applies to your concessional (before-tax) contributions, which include: employer super guarantee contributions (currently 11.5% in 2024-25), salary sacrifice contributions, and any personal contributions for which you claim a tax deduction. Non-concessional (after-tax) contributions are not affected by Division 293 — you have already paid full marginal tax on those funds before contributing them to super. Based on ATO data, approximately 150,000 Australians are assessed for Division 293 tax each year. Last updated: 2026-03-28, 2025-26 ATO rates.

The $250,000 threshold applies to your income for surcharge purposes — not just your salary. This includes taxable income, reportable fringe benefits, and investment income. The threshold is not indexed to inflation, which means more Australians fall into Division 293 territory over time as wages rise. If you are approaching the $250,000 mark, it is worth calculating whether super contributions will trigger a liability before you maximise your concessional cap.

How Division 293 Tax Is Calculated

The Division 293 calculation uses the lesser-of rule. First, calculate your income for surcharge purposes (taxable income + reportable fringe benefits). Add your total concessional contributions. If the combined total exceeds $250,000, you have a Division 293 liability. The taxable amount is the lesser of: (a) your total concessional contributions, or (b) the amount by which your income exceeds $250,000.

Worked example: You earn $280,000 in taxable income with $5,000 in reportable fringe benefits. Your total income for surcharge purposes is $285,000. Your employer contributes $27,500 to super (the concessional cap). Amount above the $250,000 threshold: $285,000 − $250,000 = $35,000. The lesser of $35,000 and $27,500 is $27,500. Division 293 tax = 15% × $27,500 = $4,125. You could pay this from savings or have it deducted from your super fund.

If your income barely exceeds $250,000, only the contributions corresponding to the excess are taxed. For example, income $255,000 and contributions $27,500 — only $5,000 of contributions are taxed ($255,000 − $250,000), giving a Division 293 tax of just $750. This makes the tax proportional rather than cliff-edge, unlike some other tax thresholds.

Paying Division 293 Tax — Options and Strategy

After you lodge your tax return, the ATO issues a Division 293 assessment notice. You then have 60 days to choose how to pay: from your personal bank account, or by requesting a deduction from your super fund balance. The ATO notifies your fund directly if you elect the super payment route.

Most financial advisers recommend paying from personal savings rather than from super. The reason is the power of compound growth inside super — every dollar kept in super continues earning returns in a concessionally taxed environment. A $4,000 Division 293 tax payment from super today could cost tens of thousands in lost superannuation balance at retirement due to compounding over 20–30 years. Paying from savings is nearly always the better financial decision for those who can afford it. Check with a registered financial adviser or tax agent for personalised advice. Based on 2025-26 ATO Division 293 tax rules.