If your income plus concessional super contributions pushes you past $250,000 in a financial year, the Australian Tax Office applies an extra 15% tax on part of your super contributions. This is Division 293 tax — a levy most high earners only discover when the ATO’s assessment notice lands in their myGov inbox, long after the financial year has ended. It is not a separate tax return item or something your payroll department warns you about. It is assessed after the fact, based on your tax return and the contribution data your super fund reports.
This guide explains who pays Division 293 tax, how the ATO calculates it, the key 2025–26 figures, and how to manage the bill. For your own numbers, use our Division 293 tax calculator.
What is Division 293 tax?
Division 293 is part of the Australian tax law that imposes an additional 15% tax on concessional super contributions made by or for high-income earners. Its stated purpose is fairness: because top-bracket earners get a bigger tax concession on super contributions than average earners, Division 293 claws back some of that advantage.
Normally, concessional contributions — employer super guarantee, salary-sacrificed amounts, and personal contributions you claim as a tax deduction — are taxed at 15% inside your super fund. When Division 293 applies to a portion of those contributions, the combined tax rate on that portion becomes 30% (15% contributions tax plus 15% Division 293 tax).
Key facts for 2025–26:
- The income threshold is $250,000 — unchanged since 1 July 2017.
- The tax rate is 15% of the lesser of the amount by which you exceed $250,000 or your concessional contributions.
- It is a personal tax liability, assessed to you — not your fund.
- It is assessed year by year. Exceeding the threshold in one year does not mean it applies forever.
Who pays Division 293 tax?
You may be liable for Division 293 tax in any financial year where two conditions both hold:
- Your Division 293 income exceeds $250,000.
- You (or your employer) made concessional super contributions during that year.
The tricky part is what counts as Division 293 income. It is deliberately broader than salary or taxable income — so people with a base salary under $250,000 still get caught when a capital gain, large bonus, termination payment, carry-forward super contributions used in a single year, or added-back rental losses push the total over the line.
Because the threshold has not moved since 2017 while wages have grown, Division 293 reaches further down the income scale each year. With the super guarantee rate rising to 12% from 1 July 2025, employer contributions alone now add $30,000 a year for someone on a $250,000 salary — the full concessional cap — before any salary sacrifice is even considered.
What counts as Division 293 income?
Division 293 income is built on the same income test used for the Medicare levy surcharge, but with reportable super contributions deliberately left out (they are counted on the contributions side instead). In plain terms, it is your taxable income plus several add-backs:
| Component | What it includes |
|---|---|
| Taxable income | Your ordinary assessable income less allowable deductions, including salary, business income, capital gains and taxable lump sums |
| Reportable fringe benefits | The reportable fringe benefits amount shown on your income statement |
| Net financial investment losses | Investment deductions that exceeded investment income (for example, a negatively geared share portfolio) |
| Net rental property losses | Rental deductions that exceeded rental income |
| Other surcharge components | Certain tax-free government pensions or benefits, target foreign income, and the net amount on which family trust distribution tax was paid, less child support paid |
The ATO takes this total — your Division 293 income — and adds your Division 293 super contributions (essentially your concessional contributions for the year, excluding any excess concessional contributions). If that combined figure exceeds $250,000, Division 293 tax applies.
Note that the contributions counted are capped in practice at your concessional cap for the year — $30,000 in 2025–26 — unless unused carry-forward caps have raised your personal limit, in which case the whole higher amount counts. This detail matters for the maximum possible bill, as we will see below.
How Division 293 tax is calculated
The formula is straightforward once you know the two inputs:
Division 293 tax = 15% × the lesser of:
- (a) the amount by which your combined Division 293 income plus Division 293 super contributions exceeds $250,000, or
- (b) your Division 293 super contributions.
In other words, the tax only bites on the contributions that push you over the threshold — never on more than you actually contributed. That also sets a ceiling on the bill: at the standard $30,000 concessional cap, the maximum Division 293 tax for 2025–26 is $4,500 (15% of $30,000).
Worked example 1: just over the threshold
Amelia earns $232,500 in Division 293 income and her employer paid $27,500 in concessional super contributions for her.
| Step | Calculation | Amount |
|---|---|---|
| Combined total | $232,500 + $27,500 | $260,000 |
| Excess over $250,000 | $260,000 − $250,000 | $10,000 |
| Taxable contributions | Lesser of $10,000 and $27,500 | $10,000 |
| Division 293 tax | 15% × $10,000 | $1,500 |
Because Amelia is only $10,000 over the threshold, only $10,000 of her contributions attracts the extra tax. She still enjoys the normal super tax concession on the other $17,500.
Worked example 2: well over the threshold
Marcus earns $272,500 in Division 293 income and his employer also contributed $27,500 to his super.
| Step | Calculation | Amount |
|---|---|---|
| Combined total | $272,500 + $27,500 | $300,000 |
| Excess over $250,000 | $300,000 − $250,000 | $50,000 |
| Taxable contributions | Lesser of $50,000 and $27,500 | $27,500 |
| Division 293 tax | 15% × $27,500 | $4,125 |
Here the excess is larger than the contributions, so the full $27,500 of concessional contributions attracts the extra 15%. Marcus’s total tax on those contributions is 30% — still well below his 47% top marginal rate, which is why concessional contributions usually remain worthwhile even under Division 293.
Comparing outcomes at a glance
| Division 293 income | Concessional contributions | Combined | Taxable amount | Division 293 tax |
|---|---|---|---|---|
| $220,000 | $27,500 | $247,500 | $0 | $0 |
| $232,500 | $27,500 | $260,000 | $10,000 | $1,500 |
| $240,000 | $15,000 | $255,000 | $5,000 | $750 |
| $272,500 | $27,500 | $300,000 | $27,500 | $4,125 |
| $320,000 | $30,000 | $350,000 | $30,000 | $4,500 |
Notice the pattern: the bill grows as you cross the threshold, but it hits a hard ceiling once the full contribution amount is taxable. Try your own figures in our Division 293 tax calculator to see exactly where you land.
How you are assessed and how to pay
You do not calculate Division 293 tax yourself on your tax return. The ATO does it for you — but only after it has received both your lodged income tax return and the contribution information from your super fund. If you have more than one fund and a fund reports late, you may receive an amended Division 293 assessment later.
When the ATO determines you are liable, it sends you a Division 293 notice of assessment. If you lodge through myTax, the notice goes to your myGov inbox; you can ask your tax agent to redirect it to them instead. If you expect to be over the threshold, myTax will also remind you about Division 293 while you are preparing your return.
You have two ways to pay the bill:
- Pay with your own money — from cash flow or savings, like any tax bill.
- Elect to release money from super — you can choose to have the amount released from your super account to cover the liability.
Pay by the due date to avoid interest. If the assessment looks wrong, check the income and contribution figures on the notice first — errors usually trace back to the tax return or the fund’s reporting. You can lodge a formal objection if you still disagree.
Strategies to manage or reduce Division 293 tax
You cannot dodge Division 293 once you are over the threshold in a given year — it is assessed on your actual income and actual contributions. But you can plan around it.
Time one-off income carefully
Because Division 293 is assessed year by year, a one-off capital gain, bonus, or termination payment is what tips many people over. Where you have genuine control over timing — for example, settling a property sale in July rather than June — spreading large income events across financial years can keep you under $250,000 in both years.
Use salary sacrifice strategically, not blindly
Salary sacrifice still makes sense at Division 293 levels: 30% total tax on super contributions compares favourably with the 47% top marginal rate. That said, the extra 15% shrinks the benefit, so model both scenarios — sacrificing versus taking the cash — with the Division 293 calculator before you commit.
Be careful with carry-forward contributions
Using unused concessional caps from the previous five years lets you contribute far more than $30,000 in a single year — but the whole higher amount counts for Division 293 purposes. A large catch-up contribution in a year your income is already over $250,000 can produce a five-figure Division 293 bill. Contribution reserving strategies cannot sidestep this: the ATO looks at the year the contribution was made and your income in that year.
Stay within the concessional cap
Track employer, salary-sacrificed and personal contributions against the $30,000 cap — with the 12% super guarantee, employer contributions alone are larger than many people realise. Note: different Division 293 rules apply to defined benefit fund members.
Frequently asked questions
What is the Division 293 threshold for 2025–26?
The threshold is $250,000 of combined Division 293 income plus Division 293 super contributions. It has been $250,000 since 1 July 2017 and is not indexed, so bracket creep pulls more people into scope each year.
How much extra tax does Division 293 actually add?
An additional 15% on the taxable portion of your concessional contributions. Combined with the standard 15% contributions tax, the effective rate on that portion is 30% — still below the 47% top marginal rate including the Medicare levy.
What is the maximum Division 293 tax I can pay?
For most people in 2025–26, the maximum is $4,500 — 15% of the $30,000 concessional contributions cap. It can be higher if carry-forward caps let you make larger concessional contributions in a single year.
Does Division 293 apply if I am only slightly over $250,000?
Yes. There is no buffer or sliding scale — exceeding the threshold by even $1 makes you liable. The saving grace is that only the excess portion of your contributions attracts the extra tax, so a small overshoot means a small bill.
Can I pay Division 293 tax from my super?
Yes. The ATO lets you either pay from your own money or make an election to release the amount from your super account. Pay by the due date on your assessment notice to avoid interest.
Does salary sacrifice still make sense if I am subject to Division 293?
Usually, yes. Paying 30% total tax on money going into super is still cheaper than paying 47% marginal tax on the same income in your hands. Run your own numbers through our Division 293 tax calculator and compare both options before deciding.
Work out your Division 293 bill in seconds
Division 293 tax rewards planning and punishes surprises. The threshold is a fixed $250,000, the rate is 15% of the taxable portion of your concessional contributions, and the ATO assesses it after the financial year ends — so the time to check your position is now, not when the notice arrives. Add up your Division 293 income, factor in your employer and salary-sacrificed contributions, and you will know exactly where you stand.
The fastest way to do that: plug your income and contributions into our free Division 293 tax calculator, see your estimated liability instantly, and adjust your super strategy before 30 June. Pair it with our super calculator and the salary breakdowns on our $300,000 salary page to plan the full picture for 2025–26.