Division 293 Tax: The Extra 15% on High-Income Super
Most people's super contributions are taxed at 15%. If your income plus concessional contributions tops $250,000, Division 293 adds another 15% — halving the tax break. It still leaves super ahead, but by a narrower margin worth knowing before you assume the full benefit.
- The answer: Division 293 charges an extra 15% on the lesser of your concessional contributions and the amount by which your income plus those contributions exceeds $250,000.
- The trap: the $250,000 threshold uses a broad income definition that adds back reportable fringe benefits, net investment losses and your concessional contributions — so it catches people whose taxable income is under $250,000.
- The recommendation: salary sacrifice usually still wins (30% beats a 47% marginal rate), but model the reduced benefit before maxing the cap.
01 What Division 293 is
Division 293 is an extra 15% tax on concessional super contributions for high-income earners, charged on top of the standard 15% contributions tax — so the effective rate on affected contributions is 30%.
It exists because the flat 15% contributions tax gives a larger benefit the higher your marginal rate. A 47% taxpayer saves 32 cents in the dollar by contributing; a 30% taxpayer saves 15. Division 293 narrows that gap by taxing the contributions of the highest earners at a rate closer to the middle.
Two things make it feel more punitive than it is. It arrives as a separate assessment after your tax return rather than being deducted at the time, so it looks like an unexpected bill rather than a rate. And it is charged personally, though you can elect to release the amount from your super fund to pay it rather than finding the cash elsewhere.
Source: ATO — Division 293 tax
02 How it's calculated
The tax is 15% of the lesser of (a) your concessional contributions and (b) the amount your 'income for surcharge purposes' plus those contributions exceeds $250,000. The income figure is broad — it adds back reportable fringe benefits, net financial investment and rental losses, and your concessional contributions — so people with taxable income below $250,000 can still be caught.
Shows: the extra Division 293 tax on your concessional contributions when income is over $250,000. Ignores: the precise income definition (which adds back several items), reportable fringe benefits, and net investment losses.
On the defaults above, the worked example shows: Division 293 charges 15% on the lesser of your contributions and the amount over $250,000 — here, on $27,500.
Source: ATO — Division 293 tax
03 Does super still win?
Usually yes, but by considerably less than the headline comparison suggests.
For someone on the 47% marginal rate, a 30% contributions tax still leaves a 17-cent saving per dollar against taking the money as salary, and the earnings inside super remain taxed at a maximum of 15% rather than 47%. Both advantages survive Division 293; they are simply about half as large.
What changes is what else becomes competitive. At a 24-cent saving, salary sacrifice comfortably beats paying down a mortgage at typical rates. At 17 cents, the two are close enough that the mortgage's certainty and accessibility often win — particularly for someone who might want the money before 60.
Two practical points. The assessment arrives after your tax return, sometimes a year or more after the contributions, and you can either pay it personally or release the amount from super to cover it. And the $250,000 threshold is not indexed, so wage growth pulls more people into it each year — someone comfortably below it today may not be in five years, and the arithmetic is worth revisiting rather than settling once.
Source: ATO — Division 293 tax
Division 293 surprises people because it uses an income definition that adds your contributions back in — so salary-sacrificing harder can be the thing that tips you over $250,000. It rarely makes super a bad idea (30% still beats 47%), but it changes the size of the win, and I'd run the number before assuming the full break. If you're hovering near the threshold, model both sides; the answer is closer than at middle incomes.
FAQ
What is Division 293 tax?
An extra 15% tax on concessional super contributions for people whose income plus those contributions exceeds $250,000, on top of the standard 15% — making the effective rate 30% on affected contributions.
What income triggers Division 293?
$250,000, measured on a broad 'income for surcharge purposes' basis that adds back reportable fringe benefits, net investment losses and your concessional contributions — so taxable income under $250,000 can still trigger it.
How is the Division 293 amount calculated?
It's 15% of the lesser of your concessional contributions and the amount by which your income plus contributions exceeds $250,000.
Sources
Regulator references
- ATO — Division 293 taxDivision 293 tax, the additional charge on concessional contributions for higher earners.Last verified: 2026-06-19
- ATO — Concessional contributions capThe concessional contributions cap, the carry-forward of unused cap, and what counts against it.Last verified: 2026-06-19
Calculator unit tests · the assertions this page's worked example is checked against, and their last result
Changelog
- 2026-06-19 — initial publish (new format)
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Jordan Reeves
Founder of Talk Through Wealth. A software engineer for over a decade before turning to retirement planning, Jordan built the projection engine after watching family members get fragmented, country-by-country advice that never reconciled. He writes about retirement the way the engine computes it: month-by-month, lifetime-long, and skeptical of any rule of thumb that hasn't been run through the math.