What income triggers Division 293 tax in Australia 2026?
For the 2026 financial year, the Division 293 tax is triggered when an individual's income for surcharge purposes and low-taxed superannuation contributions together exceed $250,000.
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How it works in practice
Understanding Division 293 Tax
Division 293 tax is an additional tax on superannuation contributions for high-income earners in Australia. It was introduced to reduce the tax concessions received by these individuals on their super contributions. The tax effectively halves the tax concession on concessional (before-tax) super contributions from 30% down to 15% for those above the threshold, making the total tax on these contributions 30%.
Income Threshold for 2026
For the 2026 financial year (1 July 2025 to 30 June 2026), the income threshold for Division 293 tax remains at $250,000. This threshold has been stable since the 2017 financial year. The tax applies to the total of your 'income for surcharge purposes' and your 'low-taxed superannuation contributions' (concessional contributions). If this total exceeds $250,000, Division 293 tax will be levied on the amount of concessional contributions that exceed the threshold, up to the value of the contributions themselves.
Important exceptions
Division 293 tax only applies to concessional (before-tax) superannuation contributions. It does not apply to non-concessional (after-tax) contributions. The tax is calculated on the lesser of the amount your combined income and contributions exceed the threshold, or your total concessional contributions. You will not pay Division 293 tax if your income for surcharge purposes is below the threshold, even if your total income is higher due to super contributions, unless your contributions push you over.
There are also specific rules for defined benefit super funds and government super schemes.
What you should do now
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Review your total income for surcharge purposes and concessional super contributions to determine if you are near the $250,000 threshold.
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If you expect to be above the threshold, consider seeking financial advice to plan your super contributions effectively.
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Ensure your super fund has your correct tax file number (TFN) to avoid higher tax rates on contributions.
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Understand that the ATO will send you an assessment notice if you are liable for Division 293 tax, outlining your options for payment.
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Familiarize yourself with the current concessional contribution caps to avoid exceeding them, which can lead to additional taxes.
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