Concessional contributions to super are normally taxed at 15% in the fund. Division 293 adds another 15% for people whose income plus concessional contributions is over $250,000. For them, contributions are taxed at 30%. This guide shows who it catches, how the amount is worked out, and why super contributions can still cost less tax than salary.
How the amount is worked out
Add your income for Division 293 purposes to your concessional contributions. If the total is over $250,000, the tax is 15% of whichever is smaller:
- your concessional contributions, or
- the amount by which the total is over $250,000.
| Income | Concessional contributions | Total | Division 293 tax |
|---|---|---|---|
| $200,000 | $32,500 | $232,500 | $0 |
| $240,000 | $32,500 | $272,500 | $3,375 |
| $300,000 | $32,500 | $332,500 | $4,875 |
At $240,000 only the $22,500 above the threshold is caught, so the tax is 15% of that. At $300,000 all $32,500 of contributions are caught.
Income is wider than taxable income
Income for Division 293 purposes includes taxable income, reportable fringe benefits, net investment losses and net rental property losses. So negative gearing does not lower it.
Take someone with $230,000 of taxable income after a $20,000 net rental loss, and $32,500 of concessional contributions. The rental loss is added back, so their Division 293 income is $250,000. Their tax is $4,875. If the loss were not added back it would be $1,875.
How it is paid
- The ATO works it out after you lodge your tax return and your fund reports your contributions, then sends a separate assessment.
- It can be paid from your own money, or you can elect to have it released from super. The election must be lodged within 60 days of the assessment.
- For members of defined benefit funds, the tax can be deferred to a debt account and paid when a benefit is taken.
The catches
- A one-off spike in income, such as a large capital gain or bonus, can bring Division 293 into play for that year. See how capital gains are taxed.
- Using carry-forward contributions in a high-income year raises the contributions caught. See carry-forward super contributions.
- The threshold of $250,000 is not indexed, so it catches more people over time.
Assumptions behind the numbers
- The threshold, rate and method are from the ATO's Division 293 guidance, checked in October 2026.
- Concessional contributions are within the $32,500 cap for 2026–27, with no excess contributions.
- Income means income for Division 293 purposes. It starts from taxable income, which for an employee from 2026–27 is after the $1,000 standard deduction for work-related expenses.
- The 47% figure is the 45% top tax rate plus the 2% Medicare levy for 2026–27, ignoring the Medicare levy surcharge.
- The ATO or a registered tax agent can confirm how Division 293 applies to a particular person.
Run your own numbers
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