Progressive Financial Solutions

What is Division 293 tax?

Division 293 tax is an additional 15% tax payable on concessional superannuation contributions (other than excess concessional contributions) made by or on behalf of high-income earners.

Who pays Division 293 tax?

When the Australian Taxation Office (ATO) issues a tax assessment for Division 293 tax, payment is the responsibility of the taxpayer to whom the assessment is issued. The tax can be paid from the taxpayer’s personal financial resources, or it can be withdrawn from superannuation. The ATO will provide a release authority allowing the tax to be withdrawn from superannuation.

Payment of the tax is not the responsibility of an employer making the contributions, nor of the superannuation fund that received the contributions.

How is liability to pay Division 293 tax determined?

When determining if Division 293 tax is payable, the first step is to calculate your income Income for Division 293 purposes is:

Taxable income (i.e. assessable income less deductions)
+ Amounts subject to family trust distribution tax
+ Reportable fringe benefits
+ Total net investment losses
+ “Low rate” contributions (i.e. non-excess concessional contributions)
– Low rate part of an assessable superannuation lump sum benefit paid to a person under 60
– Assessable First Home Super Saver released amounts

Where a taxpayer’s income exceeds $250,000, they are liable to pay Division 293 tax, unless they are exempt.

Read our 2024-2025 Superannuation and Pension Guide here.

Special arrangements

State higher level office holders who are members of a constitutionally protected superannuation fund are not liable for Division 293 tax in respect of contributions made to than fund.

Furthermore, contributions for Commonwealth justices and judges made to a defined benefit superannuation scheme established under the Judges Pension Act 1968 are not subject to Division 293 tax.

For members of other defined benefit superannuation schemes, liability to pay Division 293 tax is deferred until such time as the taxpayer is eligible to receive their benefits from the fund. Additional information on defined benefit funds can be found here:

Example:

David’s employer contributed $25,000 as concessional contributions to superannuation. His income for Division 293 purposes comprises of the following amounts:

Example 1
Example 2
Table Income
$260,000
$235,000
+ Low Rate Contribution
$25,000
$25,000
= Income for Division 293 Purposes
$285,000
$260,000
Excess Division 293 Income
$35,000
$10,000
Contributions Subject to Div 293 Tax
$25,000
$10,000

At Progressive Financial Solutions, as part of your overall financial position, we will help you understand the implications of Division 293 tax to you. Read more about our superannuation services here.

The information contained in this document does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions. Whilst all care has been taken in the preparation of this document (using sources believed to be reliable and accurate), to the maximum extent permitted by law, no person including Centrepoint Alliance Limited or any member of the Centrepoint Alliance Group of companies accepts responsibility for any loss suffered by any person arising from reliance on this information