Division 293 Tax Explained for Australian High Earners
Division 293 tax is an extra 15% tax the ATO charges on part of your concessional super contributions when your income and contributions together exceed $250,000 in a financial year. It is assessed separately from your tax return, and only the contributions above the threshold are taxed, not your whole income.
What Is Division 293 Tax?
Division 293 tax is a flat 15% additional tax applied to some of your concessional superannuation contributions once your combined income and contributions pass $250,000 in a financial year.
Concessional contributions, such as employer super guarantee payments, salary sacrifice amounts and deductible personal contributions, are already taxed at 15% inside your super fund. Division 293 tax tops this up by another 15%, so the effective tax on the affected portion of your contributions becomes 30%. It only applies to the amount above the $250,000 threshold, not to your entire income or your entire contribution.
The ATO's own worked example shows how this plays out. Someone with $240,000 of Division 293 income and $15,000 of concessional contributions has a combined total of $255,000, which is $5,000 over the $250,000 threshold. Because that $5,000 excess is smaller than the $15,000 in contributions, only the $5,000 excess is taxed, producing a Division 293 bill of $750.
Who Has to Pay Division 293 Tax?
You pay Division 293 tax if your Division 293 income plus your concessional super contributions add up to more than $250,000 in a financial year, regardless of how that income was earned.
Division 293 income is based on the same test used for the Medicare levy surcharge, built from your taxable income, reportable fringe benefits, net financial investment loss, net rental property loss, certain family trust distribution tax amounts and some super lump sum components, with reportable super contributions left out so they are not counted twice.
A single large payment, such as a bonus, back pay or a capital gain, can push someone over the threshold for one year even if their income is usually well below it. Self-employed people and sole traders who make extra personal deductible super contributions near the end of the financial year are also commonly affected, since those contributions count as concessional contributions for Division 293 purposes.
How Is Division 293 Tax Calculated?
The ATO taxes whichever amount is smaller: your total concessional contributions for the year, or the amount by which your combined income and contributions exceed $250,000.
Division 293 income | Concessional contributions | Combined total | Taxable amount | Division 293 tax (15%) |
$240,000 | $15,000 | $255,000 | $5,000 | $750 |
$260,000 | $27,500 | $287,500 | $27,500 | $4,125 |
$220,000 | $30,000 | $250,000 | $0 | $0 |
How Tax Falcon Helps If You're Close to the Threshold
Tax Falcon's certified tax-agent review and direct ATO pre-fill help make sure the income and reportable super contribution figures that feed into your Division 293 calculation are reported correctly in the first place.
The Standard Tax Return ($88) and the Sole Trader Tax Return (from $229) both include a certified tax-agent review before lodgement and direct ATO pre-fill, with no extra charge for deduction checks on the Sole Trader return. That matters most for self-employed people and contractors who make extra personal deductible super contributions close to 30 June, since getting the income and contribution figures right on your return is exactly what determines whether a later Division 293 notice is accurate.
Division 293 tax itself is assessed by the ATO separately from your return, so no service can remove it once the threshold is crossed. What Tax Falcon's Sole Trader Tax Return can do is make sure the figures the ATO uses to work it out are not wrong because of a reporting mistake.
When Will You Find Out You Owe It?
The ATO sends a separate Division 293 notice to your myGov inbox after it has processed both your tax return and your super fund's contribution reporting, which can be weeks after your income tax notice of assessment.
This Division 293 notice is a different document from your regular notice of assessment. If your income already looks close to the threshold, the ATO may flag it while you are preparing your return online. If your super fund reports contributions after you have already lodged, you may later receive an amended Division 293 assessment. If you believe the amount is wrong, you can lodge an objection with the ATO.
How Do You Pay Division 293 Tax?
You can pay Division 293 tax from your own money by the due date, or elect to have part or all of it released from your super fund within 60 days of the assessment.
Paying by the due date avoids the general interest charge that applies to late payments. If you choose to release the amount from your super fund instead, that election cannot be withdrawn or reversed once it is made, and it does not extend your payment due date. Members of defined benefit funds are generally assessed but have the debt deferred until a benefit is actually paid.
Concessional Contributions Caps and Division 293
Staying under the concessional contributions cap, $30,000 for 2025-26 and rising to $32,500 from 1 July 2026, does not automatically protect you from Division 293 tax if your income alone is high enough.
The cap and Division 293 tax are separate rules that can both apply at once. If your total super balance was under $500,000 at the end of the previous financial year, the carry-forward rule lets you use any unused concessional cap from the past five years, oldest first, which can be a useful lever for managing how contributions land across financial years, though it does not change the $250,000 Division 293 threshold itself.
Frequently Asked Questions
What triggers Division 293 tax?
Division 293 tax is triggered when your Division 293 income plus your concessional super contributions together exceed $250,000 in a single financial year. The tax then applies to whichever is smaller, your contributions or the amount over the threshold.
How much is Division 293 tax?
Division 293 tax is charged at a flat 15% on the taxable amount, on top of the standard 15% contributions tax already paid inside your super fund, bringing the effective tax on the affected contributions to 30%.
Is Division 293 tax the same as the Medicare levy surcharge?
No. The Medicare levy surcharge uses a similar income test but is a separate charge for not holding private hospital cover, while Division 293 tax is specifically about high income combined with concessional super contributions.
Can I pay Division 293 tax from my super fund instead of my own money?
Yes. You can elect to release the Division 293 amount from your super fund within 60 days of receiving your assessment, although this election cannot be withdrawn once it is made.
Does a one-off bonus or capital gain trigger Division 293 tax?
It can. A single large payment such as a bonus, back pay or a capital gain can push your income over the $250,000 threshold for that year alone, even if your income is usually lower.
Getting your income and super contribution figures right on your tax return is the first step to understanding whether Division 293 tax applies to you this year.
