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Division 293 tax is an additional 15% tax on concessional super contributions when your Division 293 income plus those contributions exceed $250,000 in a financial year. The practical effect: concessional dollars caught by the rule are taxed at a combined 30% (the standard 15% contributions tax your fund pays, plus the 15% Division 293 charge). That is still below the 45% top marginal rate, but it meaningfully reduces the super tax concession for high earners.

If you think this applies to you, here is where to start:

Check your myGov inbox for any existing Division 293 notice from the ATO.
Estimate your Division 293 income (taxable income, reportable fringe benefits, reportable employer super, and total net investment losses) and add your concessional contributions for the year.
Run the lesser-of calculation (explained in full below) to get a rough liability figure.
Decide on payment before the due date: pay from personal funds or elect to have the ATO release the amount from your super fund.
Speak to a licensed financial adviser before 30 June if you are close to the threshold or expecting a one-off income event.

Key takeaways

Point	Details
The threshold and rate	Division 293 applies at 15% when Division 293 income plus concessional contributions exceed $250,000.
The lesser-of rule	Tax is 15% of the lesser of your contributions or the excess over $250,000 — not always the full contribution amount.
ATO notification	The ATO issues a Division 293 notice to your myGov inbox after processing your tax return and fund reports.
Payment choice	You can pay from personal funds or elect the ATO release authority to pay from your super within 60 days.
Bracket creep risk	The $250,000 threshold is fixed and not indexed, so more earners are captured each year as wages and the concessional cap rise.
Amberwealth	Amberwealth provides personalised Division 293 forecasts, contribution planning, and release authority guidance for high-income Australians.

What is Division 293 tax and why does it exist?
Who does Division 293 apply to?
How is Division 293 tax calculated?
How does the ATO notify you and what are your payment options?
Lawful planning options to manage Division 293 exposure
Why bracket creep means more people face this tax every year
A practical perspective on Division 293 planning
Get a personalised Division 293 review with Amberwealth
Sources

What is Division 293 tax and why does it exist?

The policy aim is straightforward: high-income earners receive a proportionally larger tax concession from the standard 15% contributions tax than lower-income earners do, because their marginal rate is so much higher. Division 293 narrows that gap.

The rule sits in Subdivision 293-B, section 293-10 of the Income Tax Assessment Act 1997. The legislative text sets out the liability rules, the definition of taxable contributions, and the lesser-of formula. The ATO is the assessing authority and administers the tax automatically once your tax return and fund contribution reports are lodged.

The $250,000 threshold has been fixed at that level since the 2017–18 income year. Before that, the threshold was higher. The current threshold is not indexed to inflation or wages, which has real consequences over time — more on that in the bracket creep section below.

Who does Division 293 apply to?

What counts as Division 293 income

The income test is broader than your taxable income alone. The ATO adds several components together:

Taxable income (salary, wages, business income, rental income, capital gains)
Reportable fringe benefits (as shown on your payment summary or income statement)
Reportable employer super contributions (salary sacrifice amounts above the super guarantee)
Total net investment losses (investment losses that were deducted against other income are added back)

This is the same income definition used for the Medicare levy surcharge test. If you are close to $250,000 on taxable income alone, the add-backs can push you over.

Which contributions are concessional

Concessional contributions for Division 293 purposes include:

Employer super guarantee (SG) contributions
Salary sacrifice contributions
Personal contributions for which you have claimed a tax deduction
Certain roll-over amounts that are treated as concessional under the rules

Excess concessional contributions (amounts above the annual cap that are included in your assessable income) are excluded from the Division 293 calculation. The ATO’s high-income earner page sets this out clearly.

Pro Tip: A bonus, large capital gain, or genuine redundancy payment can push a single year’s Division 293 income well above $250,000 even if your base salary sits below it. If you are expecting any of these before 30 June, run the numbers early — you may still have time to adjust contribution timing or structure.

How is Division 293 tax calculated?

The formula is simple in principle, though the lesser-of rule catches people out.

The formula

Your concessional contributions for the year, OR
The amount by which your Division 293 income plus concessional contributions exceed $250,000

Worked example at FY2026–27 settings

The concessional cap for FY2026–27 is $32,500. Here is how the calculation plays out for two different earners:

Earner A’s bill is capped by the excess over $250,000 ($22,500), not the full contribution amount. Earner B’s income is already above the threshold before contributions are counted, so the lesser-of rule bites on the contribution side. The bill is capped according to the concessional contributions cap, as explained by ProjectFi.

Step-by-step calculation

Add your Division 293 income components (taxable income + reportable fringe benefits + reportable employer super + net investment losses added back).
Add your concessional contributions for the year.
Subtract $250,000 from the combined total. If the result is zero or negative, no Division 293 tax applies.
Compare that excess to your total concessional contributions.
Take the lesser of the two figures.
Multiply by 15%.

The SuperGuide explainer includes a calculator and additional worked examples if you want to test different income and contribution combinations.

Legislative note: The specific liability rule and the lesser-of formula are codified in S 293-10 of the Income Tax Assessment Act 1997 for readers who want the primary text.

How does the ATO notify you and what are your payment options?

Assessment timing

The ATO does not assess Division 293 in real time. It waits until both your income tax return and your super fund’s contribution reports have been processed, which typically means notices arrive several months after the end of the financial year. Do not expect a notice in July.

Once both data sources are reconciled, the ATO issues an “Additional tax on concessional contributions (Division 293)” notice directly to your myGov inbox. The notice states the amount owing and the due date.

Payment options

Pay from personal funds: Transfer the amount directly by the due date shown on the notice. No impact on your super balance.
Elect the ATO release authority: Within 60 days of the notice, you can instruct the ATO to release the tax from your super fund. The ATO sends a release authority to your fund, which pays the amount on your behalf. This preserves personal cash flow but reduces your super balance and the compounding growth on those funds over time.
Defined benefit interests: If your super is in a defined benefit scheme, different rules apply. The ATO’s rates and thresholds page covers the end-of-year interest rates applied to deferred Division 293 debts for defined benefit members.

If you think the assessment is wrong

Check that your tax return income figures and your fund’s contribution reports match what you expect.
Contact your super fund to confirm the contribution amounts they reported to the ATO.
If there is a discrepancy, lodge an amendment to your tax return or ask your fund to correct its report.
For a formal dispute, follow the ATO’s objection process outlined on the notice itself.

Lawful planning options to manage Division 293 exposure

Getting a Division 293 bill is not necessarily a problem to eliminate — sometimes accepting it is the right call. But knowing your options before 30 June gives you real choices.

Pre-year-end checklist

Forecast your Division 293 income by adding all income components (including expected bonuses, capital gains, and reportable fringe benefits) to your projected concessional contributions.
Run the lesser-of calculation using the figures above to estimate your liability.
Decide whether to reduce concessional contributions. If your income is already well above $250,000, reducing contributions only reduces the bill if the lesser-of rule is binding on the contribution side (Earner B’s scenario above). If income alone exceeds $250,000 by more than your contribution total, reducing contributions saves you 15% on every dollar reduced.
Consider delaying discretionary income events (such as triggering a capital gain) to a year where your income is lower, if that is commercially sensible.
Review carry-forward concessional contributions. Catch-up contributions remain concessional for Division 293 purposes. Depending on which side of the lesser-of rule binds, a large catch-up year can increase your bill significantly. The concessional cap planning guide covers how the FY2026–27 cap changes interact with carry-forward rules.
Decide on the release authority as a cashflow tool. Paying from super preserves personal liquidity but compounds the opportunity cost over a long retirement horizon.

Pro Tip: If you are within $30,000 of the $250,000 threshold, a single salary sacrifice adjustment or a decision to delay a bonus can shift your entire liability. Run the numbers with your adviser in April or May, not after 30 June.

Warnings

Do not pursue artificial or contrived arrangements to avoid Division 293. The ATO has general anti-avoidance provisions that apply to schemes designed to reduce a tax liability without genuine commercial substance. Personalised strategies — especially those involving salary packaging, trust distributions, or SMSF structures — require advice from a licensed financial adviser or registered tax agent. Amberwealth’s superannuation advice services cover exactly this kind of planning work.

Why bracket creep means more people face this tax every year

The top marginal rate for individuals earning over $190,000 is 45% (excluding the 2% Medicare levy). Against that, the combined 30% effective rate on concessional contributions caught by Division 293 still represents a meaningful saving — 15 percentage points below the top rate. Super contributions remain tax-efficient even for affected earners.

The structural issue is the fixed threshold. The $250,000 level has not moved since 2017–18, while wages, the super guarantee rate, and the concessional cap have all increased. As ProjectFi observes, the rising concessional cap (now $32,500 for FY2026–27) also lifts the maximum possible Division 293 bill at the cap. People who were comfortably below the threshold five years ago may now be above it purely because of wage growth and higher SG contributions, with no change in their real purchasing power.

Statistic to watch: At the $32,500 concessional cap, the maximum Division 293 bill in FY2026–27 is $4,875 — up from lower amounts in prior years when the cap was smaller.

Pro Tip: Schedule an annual review of your projected income and contribution plan, ideally in March or April. Bonuses, CGT events, and SG rate increases can all shift your position relative to the threshold in a single year.

Why bracket creep means more people face this tax every year — overview diagram

A practical perspective on Division 293 planning

Most articles on Division 293 treat it as a problem to solve. The more useful framing is that it is a signal worth reading.

The question is not “how do I avoid this tax?” but “am I making the most of the contribution structure I have, given this tax exists?”

Where I see clients get into trouble is not the tax itself but the reaction to it. Some reduce contributions to zero to avoid the bill, which costs them far more in lost compounding than the Division 293 charge ever would. Others pay from super without thinking through the long-run balance impact, particularly when they are 10–15 years from retirement. Neither response is automatically wrong, but both deserve a proper calculation before acting.

The release authority option is genuinely underused as a cashflow tool for clients with irregular income. If you had a high-income year because of a one-off capital gain or a business sale, paying Division 293 from super rather than from the proceeds can make sense — but only if your super balance can absorb it without disrupting your retirement planning trajectory.

The other thing worth saying plainly: the $250,000 threshold is not going up. Wage growth will keep pulling more people into Division 293 territory. If you are currently sitting at $230,000–$240,000 in Division 293 income, this is not a distant concern.

A practical perspective on Division 293 planning — overview diagram

Get a personalised Division 293 review with Amberwealth

High-income earners navigating Division 293 need more than a formula — they need a forecast that accounts for their specific income mix, contribution history, and retirement timeline.

Amberwealth

Amberwealth works with professionals, pre-retirees, and business owners across Victoria, New South Wales, South Australia, and Tasmania to build contribution strategies that account for Division 293 from the outset. A Division 293 review with Amberwealth covers your projected liability for the current year, a cost-benefit analysis of the payment options (personal funds versus release authority), and a contribution plan that balances your super growth against the tax. For clients with SMSF structures or defined benefit interests, the analysis goes deeper.

To get started, use the superannuation calculator for a quick forecast, or book a consultation through Amberwealth’s superannuation advice page to speak directly with Adam about your situation.

Sources

The following primary and reputable sources were used in this article and are worth bookmarking for your own reference:

Amber Wealth Pty Ltd (ABN 16 653 279 013) is a Corporate Authorised Representative (No. 1310815) of Lifespan Financial Planning Pty Ltd (ABN 23 065 921 735), holder of Australian Financial Services Licence (AFSL) No. 229892. Financial advice is provided by Adam Sobczak, ASIC Authorised Representative No. 1234769.

General Advice Warning: The information on this website is general information only and is not intended to be a recommendation. We strongly recommend you seek advice from your financial adviser as to whether this information is appropriate to your needs, financial situation and investment objectives. Whilst every care has been taken in the preparation of this website, Amber Wealth Pty Ltd, its directors, authors, consultants, editors and any persons involved in the construction of this website, expressly disclaim all and any form of liability to any person in respect of this website and any consequences arising from its use of this information.

This article is general information, not a substitute for advice from a qualified financial advisor. Consult a qualified financial professional about your own circumstances before acting on anything here.

Division 293 tax for high-income Australians