Quick answer: Division 293 is an extra 15% tax on your concessional super contributions when your income plus those contributions exceeds $250,000 in a financial year. The standard 15% contributions tax plus the extra 15% means the caught contributions are taxed at 30% — still well under the 47% top marginal rate, but the real sting is how the threshold works: it hasn’t moved since 2017-18 while salaries, the super guarantee rate, and the contribution caps all have, so more Australians trip over it every year.
If your super strategy involves salary sacrifice or large deductible contributions, this sits directly on top of our 2026-27 contribution caps guide and our salary sacrifice explainer — the caps decide how much you can put in, this article decides how much of the tax concession you actually keep.
How it works — the Hannah example
Hannah earns $260,000 in 2026-27. Her employer pays 12% super guarantee: $31,200. That’s her entire Div 293 picture, because she salary sacrifices nothing:
- Division 293 income: $260,000 (her taxable income; the ATO’s definition adds back things like net rental losses and reportable fringe benefits — more on that below).
- Division 293 super contributions: $31,200 (her employer’s SG).
- Combined total: $291,200 — that’s $41,200 over the $250,000 threshold.
The tax is 15% of the lesser of the excess ($41,200) or the contributions ($31,200). The lesser is $31,200, so Hannah’s Division 293 bill is $4,680. Her $31,200 of contributions has now been taxed at 30% in total ($9,360) instead of 15% ($4,680).
Note what happened here: Hannah made no voluntary contributions and did nothing clever. At roughly a $223,200 salary (by rough arithmetic — $250,000 ÷ 1.12 — the ATO doesn’t publish a salary equivalent, and deductions change it), 12% SG alone pushes the combined total over the line. High earners are caught by their employer’s compulsory contributions before they contribute a cent themselves.
Division 293 figures for 2026-27
| Item | 2026-27 figure |
|---|---|
| Division 293 threshold | $250,000 (income + concessional contributions; unchanged since 2017-18, not indexed) |
| Division 293 rate | 15% of the lesser of the excess over $250,000 or your concessional contributions |
| Maximum combined contributions tax | 30% (15% standard + 15% Division 293) |
| Concessional contributions cap | $32,500 (what the 15% + 15% can apply to) |
| Super guarantee rate | 12% — at the $270,830 maximum contribution base, SG alone is ~$32,500 |
| Top personal marginal rate (for comparison) | 47% (45% + 2% Medicare levy) — Div 293 still leaves super 17 points cheaper |
| Defined-benefit deferred-debt interest | Average 10-year Treasury bond rate (4.6148% for 2025-26; the 2026-27 rate is published after year-end) |
Sources: ATO — Division 293 tax on concessional contributions; ATO — Division 293 threshold rates table.
The calculation, step by step
Step 1 — Work out your Division 293 income. The ATO uses the same broad income definition as the Medicare levy surcharge, disregarding reportable super contributions. It adds up: your taxable income, total reportable fringe benefits, net financial investment losses, net rental property losses, and the net amount on which family trust distribution tax was paid — then subtracts super lump sum taxed elements with a zero rate and any assessable First Home Super Saver released amount. The traps here are the add-backs: a rental loss reduces your taxable income but is added back for Division 293, so negatively geared landlords get caught at lower salaries than they expect.
Step 2 — Work out your Division 293 super contributions. These are your concessional contributions (employer SG, salary sacrifice, deductible personal contributions, some rollovers) minus any excess concessional contributions. Two details most guides skip: if you used carry-forward amounts and your effective cap is higher, all the contributions inside that higher cap count for Division 293. And the ATO has no discretion to disregard or reallocate contributions for Division 293 purposes — even if it agrees to disregard an excess for contributions-tax purposes, that amount is added back into the Division 293 calculation.
Step 3 — Compare the combined total to $250,000. Income (Step 1) + contributions (Step 2). If the total is $250,000 or less, nothing happens. If it’s $250,001, you’re in — there is no sliding scale or grace band.
Step 4 — Take 15% of the lesser amount. The lesser of (a) the excess over $250,000, or (b) your Division 293 super contributions. That’s your Division 293 tax. Your fund has already paid 15% contributions tax on those dollars, so the total on the caught portion is 30%.
Worked example: Hannah’s full 2026-27 numbers
Hannah again — salary $260,000, SG $31,200, no other income adjustments, no voluntary contributions:
| Step | Calculation | Result |
|---|---|---|
| Division 293 income | $260,000 taxable income (no add-backs) | $260,000 |
| Division 293 super contributions | 12% × $260,000 SG (under the $32,500 cap) | $31,200 |
| Combined total | $260,000 + $31,200 | $291,200 |
| Excess over threshold | $291,200 − $250,000 | $41,200 |
| Taxable contributions (lesser of) | min($41,200, $31,200) | $31,200 |
| Division 293 tax | 15% × $31,200 | $4,680 |
Her total tax on those contributions: 15% standard ($4,680) + 15% Division 293 ($4,680) = $9,360, or 30%. Model your own position with our super calculator and check where you sit in the brackets with our 2026-27 income tax rates guide.
The partial-hit version. Mei earns $235,000. SG is $28,200. Combined: $263,200 — only $13,200 over the line. The lesser of $13,200 and $28,200 is $13,200, so her Division 293 tax is $1,980. That means $13,200 of her contributions is taxed at 30% and the remaining $15,000 at 15%. Being $1 over the threshold doesn’t expose all your contributions — only the excess amount (or your total contributions if those are smaller).
How the notice arrives — and how you pay
The ATO sends an Additional tax on concessional contributions (Division 293) notice only after it holds both your income tax return and your fund’s contribution data. That’s why the notice lags your normal assessment by months — and if you hold more than one fund and a second fund reports after you’ve lodged, the ATO can issue an amended Division 293 assessment. A second notice for the same year is not necessarily an error; check it against both funds before objecting.
You then have two ways to pay:
- Pay from your own money by the due date on the notice — pay by the due date and you avoid interest.
- Elect to release money from super. You have up to 60 days from the date of the assessment to complete the election (ATO online: Super → Manage → Division 293 election). Two warnings the ATO states plainly: the 60 days gives you extra time to decide — it does not extend the payment due date, so the liability should still be paid by the due date on the notice. And once you lodge an election, it cannot be withdrawn or reversed.
If you believe the assessment is wrong, it’s usually a mistake in your return or in what your fund reported — correct the return or talk to the fund first; changes flow through to the Division 293 calculation automatically. If you still disagree, you can lodge an objection.
Common mistakes
- Thinking salary sacrifice gets you under $250,000. Sacrificing $1,000 cuts your taxable income by $1,000 but raises your Div 293 contributions by $1,000 — the combined total is identical. (It still saves you money — see the FAQ — just not by dodging the threshold.)
- Forgetting rental losses are added back. A $20,000 net rental loss that pulled your taxable income under $250,000 gets added straight back into Division 293 income. Landlords on $230k–$245k salaries are the classic surprise victims.
- Assuming one bad year means you’re a “Div 293 person” now. It’s assessed year by year. A redundancy payout or a capital gain from selling shares can trigger it once and never again.
- Missing the 60-day release election window. The notice sits in your myGov inbox, you mean to deal with it, and suddenly you can only pay from your own cash. Set a reminder when you lodge.
- Assuming a second notice is a duplicate. Multiple funds reporting at different times produce amended assessments — reconcile before you object.
- Defined-benefit members ignoring the debt account. You can’t release from a defined-benefit interest, so the tax is deferred — but the debt account accrues end-of-year interest until your benefit is paid. Voluntarily paying by 30 June each year stops the interest.
- Using carry-forward contributions without modelling Div 293. A big catch-up deductible contribution in a high-income year counts in full for Division 293 — see our caps guide for the carry-forward mechanics.
Tips for 2026-27
- Model the combined total before 30 June, not after. Add your expected taxable income (with add-backs) to your expected concessional contributions. A June top-up that pushes the combined figure over $250,000 converts 15%-taxed contributions into 30%-taxed ones — still better than 47%, but do it with open eyes.
- Time one-off income if you can. A capital gain or termination payment in a year when you’re already near the line is what creates single-year Div 293 bills. Where you control timing, spread it.
- Keep sacrificing — for the right reason. Above the line, salary sacrifice still wins by 17 percentage points (47% vs 30%). The detailed maths is in our salary sacrifice guide.
- Claim every deduction you’re entitled to. Skipping a super deduction to “reduce” Div 293 is backwards — the FAQ below shows the numbers.
- Reconcile fringe benefits and rental losses early. These are the two add-backs that surprise PAYG earners; both are visible in your payment summary and tax return before you lodge.
- Check our tax deductions checklist for the deduction-notice mechanics that decide whether a personal contribution counts as concessional in the first place.
Division 293 vs Division 296 — don’t mix them up
| Division 293 | Division 296 | |
|---|---|---|
| Status | Longstanding (threshold $250,000 since 2017-18) | Now law — applies from 1 July 2026 (ATO — Better targeted superannuation concessions) |
| Trigger | Income + concessional contributions > $250,000 | Total super balance > $3 million (further 10% above $10m) |
| Extra tax | 15% on the lesser of the excess or the contributions (total 30%) | 15% on earnings above $3m (effective 30%); 40% above $10m |
| Assessed | After your tax return + fund data | From the 2027-28 financial year |
FAQ: real questions, real answers
Does salary sacrifice make Division 293 worse?
No — and it doesn’t make it better either. Sacrificing $1,000 cuts your taxable income by $1,000 and raises your Div 293 contributions by $1,000, so the combined total (and the threshold test) doesn’t move. But it still saves you money: at the 47% top rate, $1,000 of salary costs $470 in tax while $1,000 into super under Div 293 costs 30% = $300. You’re $170 better off. Sacrifice for the 17-point saving, not to dodge the threshold.
Can I just not claim the deduction on a personal contribution to avoid it?
The maths says no. Take Hannah: $260,000 salary, $31,200 SG, and a $1,000 personal contribution. If she claims the deduction: Div 293 income $259,000 + contributions $32,200 = $291,200 combined, Div 293 tax $4,830. If she doesn’t claim: income stays $260,000, contributions $31,200 = $291,200 combined, Div 293 tax $4,680 — she “saves” $150 of Div 293 but loses a $1,000 deduction worth $470 at her 47% rate. She’s $320 worse off. Never skip the deduction; see the deduction mechanics in our tax deductions checklist.
I sold some shares and had one big year — am I stuck with Division 293 forever?
No. It’s assessed year by year. A capital gain, redundancy payout, or bonus can push you over $250,000 for a single year and the ATO assesses just that year. If your income falls back the next year, Division 293 stops applying. This is also why one-off events deserve a contribution-timing check before 30 June.
Why did my notice arrive months after my tax assessment — and why did I get a second one?
The ATO can only issue the Div 293 notice once it has both your tax return and your fund’s contribution data, so it lags. If you hold more than one super fund and one reports late, the ATO issues an amended assessment. Match both notices against both funds’ statements before assuming an error.
Should I pay from super or from my own money?
Paying personally preserves your super balance — usually better if you’re still building it and can afford the cash. Releasing from super preserves your cash flow but shrinks the balance. Either way, decide within 60 days of the assessment date if you want the release option, and pay by the due date on the notice to avoid interest. The election can’t be reversed, so don’t lodge it speculatively.
I’m in a defined-benefit fund and never saw these “contributions” — why am I being taxed?
For defined-benefit members the ATO measures contributions as the annual increase in the benefit you’re expected to receive — notional amounts you never handled. You can’t release them from the fund, so payment is deferred until a benefit is paid, sitting in a debt account that accrues end-of-year interest (4.6148% for 2025-26). You can voluntarily pay it down by 30 June each year to stop the interest, including from another fund’s release authority.
Division 293 is not a penalty and it’s not avoidable by cleverness — the income definition is deliberately wide and the ATO has no discretion over the contributions side. What you can control is the timing: model the combined total before 30 June, understand that salary sacrifice moves the dollars without moving the threshold, and act within 60 days when the notice lands. At 30% total versus 47% outside super, the concession is smaller than it looks — but it’s still a concession.
