Australia Better Targeted Super Concessions Calculator (Div 296)
Calculate the Better Targeted Super Concessions (Division 296) tax for 2026 — Treasury's new tax on the earnings attributable to super balances above $3M. From 1 July 2025: additional 15% tax (on top of 15% existing super earnings tax) on earnings proportional to balance above $3M. Reduces tax concessions for very-large super balances.
Division 296 — What It Does
From 1 July 2025: additional 15% tax on earnings attributable to the portion of super balance above $3M. Combined with existing 15% super earnings tax = 30% effective rate on the high-balance portion. Threshold NOT indexed (stays at $3M nominally, will tighten over time as wages grow). Treasury estimates affects ~80,000 Australians initially.
How Earnings Attributable to >$3M Is Calculated
Proportion = (Total Super Balance - $3M) / Total Super Balance. Earnings = Closing Balance - Opening Balance + withdrawals - net contributions. Earnings × Proportion = the taxable portion. Then × 15% = Division 296 tax. Includes UNREALISED gains — controversial point, taxed even if not sold. Example: TSB $5M, earnings $200K → Proportion 40%, taxable earnings $80K, Division 296 tax $12,000.
Loss Carry-Forward
Negative earnings (super balance drops) carry forward to offset future Division 296 earnings. Example: TSB drops $100K in year 1 → carry $40K loss (Proportion × $100K) forward. Year 2 earnings $200K → first $40K offset → only $40K taxable. Cannot offset against other taxes. Cannot be transferred to other members or refunded.
Payment Mechanics
ATO will issue Division 296 assessment after year-end. Two payment paths: (1) Pay from personal funds (cash, taxable income). (2) Pay from super fund via release authority (similar to Div 293 mechanism). Most affected members will use super-fund release. Annual obligation. Most superfunds will report TSB and earnings to ATO automatically by Oct 31 each year.
Sources: Australian Taxation Office (ATO) Division 296 information, Treasury Better Targeted Super Concessions consultation paper, Federal Budget 2023-24. Last updated: May 2026.
Frequently Asked Questions
What is the 'Better Targeted Super' tax?
From 1 July 2025: additional 15% tax (Division 296) on earnings attributable to super balances above $3M. Combined with existing 15% super earnings tax = 30% effective on high-balance portion. Threshold NOT indexed.
Does Division 296 tax unrealized gains?
Yes — controversial point. Earnings calculated from change in Total Super Balance, which includes unrealized investment gains (paper value changes). Critics argue this taxes paper wealth that can disappear in market downturns.
What if my super balance drops?
Negative earnings carry forward to offset future Division 296 earnings. Cannot offset against other taxes. Cannot transfer to other members. Cannot be refunded. Reduces practical tax bite when markets fluctuate.
How is the tax paid?
ATO issues Division 296 assessment after year-end (June 30). Two payment options: personal cash OR release from super fund via release authority (like Div 293). Most members choose super release. Annual obligation.
How many Australians are affected?
Treasury estimates ~80,000 Australians initially have super balances above $3M. Will grow over time as the $3M threshold is NOT indexed for inflation/wage growth. Within 30 years could affect a much larger group.