✅ Quick Answer: Division 293 tax adds an extra 15% tax on concessional super contributions once your income plus contributions exceeds $250,000 — bringing the effective tax rate on those contributions to 30% instead of 15%. It's charged separately from your regular income tax assessment and can be paid from personal funds or released from your super balance.
Superannuation contributions made from pre-tax income — known as concessional contributions — are normally taxed at a flat 15% inside your super fund, well below most people's marginal tax rate. Division 293 tax removes part of that advantage for high earners.
If your income plus your concessional contributions exceeds $250,000 in a financial year, the ATO charges an additional 15% tax on some or all of your concessional contributions. This brings the effective tax rate on those contributions to 30% instead of 15% — still generally lower than the 45% top marginal tax rate, but a meaningful reduction in the super tax concession for high earners.
Division 293 income is a broader measure than your salary alone. It includes:
This means some people are surprised to discover they're above the $250,000 threshold even though their base salary looks well below it — a large fringe benefit, a big negatively-geared property loss, or a high super contribution for the year can all push combined Division 293 income over the line.
Division 293 tax is 15% of the lesser of:
| Income (excl. super) | Concessional Contributions | Amount Over $250,000 | Division 293 Tax |
|---|---|---|---|
| $240,000 | $25,000 | $15,000 | 15% × $15,000 = $2,250 |
| $280,000 | $25,000 | $55,000 | 15% × $25,000 = $3,750 |
| $320,000 | $30,000 | $100,000 | 15% × $30,000 = $4,500 |
Note: the tax always applies to the smaller of the two figures, which is why it's capped at 15% of your total concessional contributions even for very high income earners.
🧮 Calculate Your Division 293 Tax →After you lodge your tax return, the ATO issues a separate Division 293 assessment notice — it's not included in your regular income tax bill. You have two ways to pay:
Many high earners choose the release option since the tax relates to a superannuation benefit — but paying from personal funds preserves more of your long-term super balance for retirement.
What is Division 293 tax?
Division 293 tax is an additional 15% tax on concessional (before-tax) super contributions for individuals whose income plus concessional contributions exceeds $250,000. It is charged on top of the standard 15% contributions tax, effectively taxing the super contributions of high earners at 30% total instead of 15%.
Who has to pay Division 293 tax?
Division 293 applies when your income (including taxable income, reportable fringe benefits, total net investment losses, and reportable super contributions) plus your concessional super contributions exceeds $250,000 in a financial year. This primarily affects high-income professionals, executives, and business owners with significant pre-tax income.
How is Division 293 tax calculated?
The tax is 15% of the lower of: (a) your concessional contributions, or (b) the amount by which your combined income and contributions exceeds $250,000. For example, if your income is $280,000 and you made $25,000 in concessional contributions, $30,000 exceeds the threshold. The tax is 15% multiplied by $25,000 (concessional contributions) = $3,750.
Can I reduce my Division 293 tax bill?
Strategies to reduce Div 293 include: making after-tax (non-concessional) contributions instead of concessional ones since non-concessional contributions are not subject to Div 293; timing large salary sacrifice contributions to stay under the $250,000 threshold; or contributing to a low-income spouse's super where the tax treatment is more favourable.
How do I pay my Division 293 tax bill?
The ATO issues a separate Division 293 assessment notice after you lodge your tax return. You can pay it from personal savings, or elect to release the amount from your super fund using a Release Authority, which the ATO sends electronically to your fund on your request.
Is Division 293 tax the same as the Medicare Levy Surcharge?
No. Division 293 tax is an extra 15% tax on concessional super contributions for high income earners above $250,000. The Medicare Levy Surcharge is a separate 1-1.5% levy on income for higher earners without private hospital cover. They are assessed independently and can both apply to the same person.
Does Division 293 tax apply to non-concessional contributions?
No. Division 293 tax only applies to concessional (pre-tax) contributions, including employer Superannuation Guarantee payments and salary sacrifice. Non-concessional (after-tax) contributions are not subject to Division 293 tax, though they are still subject to the non-concessional contributions cap.
What income counts toward the $250,000 Division 293 threshold?
The threshold includes taxable income, reportable fringe benefits, total net investment losses (including negative gearing losses), and your low-tax concessional contributions for the year. This broader definition means some people are surprised to find they're above the threshold even if their salary alone is under $250,000.