Earn over about $250,000 and the tax discount on your super contributions shrinks: Division 293 adds an extra 15% on some or all of them. This calculator shows if you're caught and what the bill looks like.
What Division 293 is
Concessional super contributions are normally taxed at a flat 15% inside the fund, which is a big discount if your marginal rate is 45%. Division 293 claws part of that back from high earners. Once your income plus concessional contributions passes $250,000, an extra 15% applies to the contributions above the line, taking them to a total of 30%. Even at 30%, super remains cheaper than the 47% (including Medicare levy) you would pay on the same dollars as salary.
How the tax is worked out
The ATO adds your income for surcharge purposes (taxable income, plus reportable fringe benefits and net investment losses) to your low-tax contributions. The extra 15% applies to the lesser of your contributions and the amount above $250,000. Someone on $240,000 with $30,000 of contributions is $20,000 over, so only $20,000 attracts the extra tax: a $3,000 bill. Someone on $300,000 pays the extra 15% on all $30,000, which is $4,500.
The threshold is not indexed
The $250,000 line has not moved since 2017, while wages have. Each year it drags more people in, including anyone whose income spikes once from a bonus, redundancy payout, or capital gain. A one-off good year can trigger a one-off Division 293 assessment even if you normally earn well under the line.
Paying the bill
The assessment arrives after you lodge your return, separate from your normal notice. You can pay it from your own pocket or ask the ATO for a release authority to pull the money out of your super fund. Paying from outside super leaves more compounding inside, if cash flow allows.
Division 293 is not a reason to stop salary sacrificing. Contributions taxed at 30% still beat salary taxed at 47% for a top-rate earner; the gap is just smaller. Run the numbers with our salary sacrifice calculator before changing anything.
Frequently asked questions
What is Division 293 tax?
An extra 15% tax on concessional super contributions for high earners. It applies once your income plus concessional contributions exceeds $250,000, taking the tax on affected contributions from 15% to 30%.
How is Division 293 calculated?
Add your income to your concessional contributions. The extra 15% applies to the lesser of your contributions and the amount over $250,000. On $240,000 income with $30,000 contributions, only the $20,000 excess is hit, so the bill is $3,000.
Is the $250,000 threshold indexed?
No. It has been fixed since July 2017, so wage growth pulls more people over the line each year, including those with one-off spikes from bonuses or capital gains.
Can I pay Division 293 tax from my super?
Yes. The ATO assessment comes with the option of a release authority that lets your fund pay the amount out of your super balance, or you can pay it from your own money and leave the super untouched.
Is salary sacrifice still worth it if I pay Division 293?
Usually yes. Affected contributions are taxed at 30%, which still beats the 47% top marginal rate (including Medicare levy) on the same money taken as salary. The benefit shrinks but rarely disappears.