How Division 293 tax works
Concessional (before-tax) super contributions are normally taxed at a flat 15% inside your fund. For higher earners that is a large saving against their marginal rate, so Division 293 adds another 15% on some of those contributions, taking the tax on them to 30%. It applies once your income for Division 293 purposes, broadly your taxable income plus your concessional contributions, goes over $250,000 in a financial year.
The $250,000 threshold and the lesser-of rule
The extra 15% does not hit all your contributions. It applies to the lesser of your concessional contributions or the amount your Division 293 income sits above $250,000. If you are only a little over the threshold, only that slice is taxed. Once the amount you are over the threshold is bigger than your contributions, your full contributions are caught. That is why someone $40,000 over with $30,000 of contributions pays on the $30,000, while someone $20,000 over with the same contributions pays on the $20,000.
Paying and reducing Division 293 tax
The ATO works out Division 293 after you lodge your return and sends an assessment. You can pay it yourself or elect to release the money from your super fund. There is no way to avoid it once you are over the threshold, but keeping concessional contributions to what you need, and timing large deductible contributions, changes how much is exposed. Treat this as a way to see the numbers, not as financial advice.
Frequently asked questions
How is Division 293 tax calculated?
Division 293 tax is 15% of the lesser of two amounts: your concessional (before-tax) super contributions, or the amount your Division 293 income sits over $250,000. So if you earn $260,000 and put $30,000 into super, your Division 293 income is $290,000, which is $40,000 over the threshold. The lesser of $30,000 and $40,000 is $30,000, so the tax is 15% of $30,000, which is $4,500.
Who pays Division 293 tax?
Individuals whose income for Division 293 purposes, broadly their taxable income plus their concessional super contributions, is more than $250,000 in a financial year. It targets high-income earners, because the standard 15% tax on concessional contributions is a bigger concession the higher your marginal rate.
What is Division 293 income?
It is a combined figure: your taxable income plus your low-tax (concessional) super contributions, with a few add-backs such as reportable fringe benefits and net investment losses. This calculator uses the standard estimate of taxable income plus concessional contributions. Reportable super contributions are not double-counted.
How can I reduce Division 293 tax?
There is no way to avoid it once you are over $250,000, but you can lower the contributions caught by it. Keeping concessional contributions to what is needed, timing large deductible contributions across years, and managing taxable income through legitimate deductions all reduce the amount exposed. This is general information, so check your situation with a licensed adviser.
Is it better to pay Division 293 tax from super?
You can pay it from your own money or release it from your super fund. Paying from super keeps more cash in your pocket now but leaves less compounding in your retirement savings. Paying from outside super keeps your balance growing. Which is better depends on your cash flow and how far you are from retirement.
What is the maximum Division 293 tax?
The tax is 15% of the contributions caught, and only concessional contributions up to the cap are counted. For 2025-26 the concessional cap is $30,000, so on the cap the most Division 293 tax is 15% of $30,000, which is $4,500 a year, unless you are using carried-forward unused cap space.
This tool is a guide, not financial advice.
