Division 293 tax can catch high income earners off guard.
A pay rise, bonus, capital gain, or extra super contribution can push you over the line before you realise it.
A Division 293 calculator gives you a practical way to estimate the likely extra tax before the ATO Division 293 assessment arrives.
- Extra super tax: Division 293 is an extra tax on certain concessional super contributions for high income earners.
- Current threshold: The current threshold is $250,000, but you should check current ATO guidance before acting or advising, because rules and reporting settings can change (Russell Investments guide to high income super tax).
- Current rate: The tax rate is currently 15% on the affected amount (Richify Division 293 calculator explanation).
- Lesser of rule: The tax applies to the lesser of the amount above the threshold or the relevant super contributions (Sum Money Division 293 calculator guide).
- Common triggers: Salary sacrifice, employer contributions and deductible personal contributions may affect the result (Calk Division 293 calculator overview).
Introduction to Division 293 Tax for High Earners
If you’re on a strong salary, receive bonuses, run a business, or sell investments during the year, a Division 293 calculator is worth using before year end and again before you lodge. Many people look only at taxable income and miss the super side of the formula.
That’s where the surprise usually happens. The ATO doesn’t just look at base salary. It looks at a broader income test and then compares that with concessional super contributions.
Practical rule: If you’re anywhere near the threshold and you’ve used salary sacrifice super or claimed personal deductible super contributions, estimate Division 293 before assuming your super tax outcome is settled.
What Is Division 293 Tax and Who Is Affected
Division 293 tax is an extra tax on concessional super contributions for higher income earners. The policy intent is straightforward. If your income is above the relevant threshold, the government claws back part of the concessional tax treatment that applies to super contributions.
For affected taxpayers, concessional contributions that would usually be taxed at 15% in the fund can effectively face 30% overall. The extra 15% is imposed through a separate ATO assessment, not through your normal fund tax processing. The ATO sets out the rules, threshold test, and assessment process in its guidance on Division 293 tax for individuals.
A calculator helps you estimate exposure before the ATO issues that assessment. That matters if you are deciding whether to salary sacrifice more, claim a personal super deduction, or set aside cash for the liability.
Who usually needs a Division 293 calculator
You should pay attention to Division 293 if your income is close to or above the threshold, especially where your year is not clean and predictable.
The clients I see caught most often are:
- Employees on strong base pay plus bonuses: bonus timing can push you over the line
- Salary sacrifice users: extra concessional contributions can increase the amount exposed
- People claiming personal deductible contributions: a deduction that helps your personal return can still create Division 293 tax
- Business owners and sole traders: income can move materially late in the year
- Investors with capital gains or changing deductions: one transaction can change the outcome
- People with multiple employers or super funds: contribution records are easier to miss
- Defined benefit members: the rules are more technical and often need specialized advice
The practical risk is misjudging who is affected. A taxpayer on a salary below the threshold can still receive a Division 293 assessment once reportable amounts and concessional contributions are taken into account.
Division 293 threshold and rate
The headline settings are simple. The threshold is $250,000, and the extra tax rate is 15% on the taxable amount.
The difficult part is applying those settings correctly. Division 293 does not automatically apply to all of your concessional contributions once your income crosses the threshold. The additional tax is generally worked out by reference to the lower of:
- your concessional contributions subject to the rules, or
- the amount by which your income plus relevant contributions exceeds the threshold
That distinction matters in practice. If you are only slightly above the threshold, the assessment may be lower than expected. If you are well above it and you have used the full concessional cap, the exposure is usually clearer.
| Item | Current position | Why it matters | Action step |
|---|---|---|---|
| Division 293 threshold | $250,000 | Crossing this point can trigger the extra tax | Estimate early if your year includes bonuses, gains, or deductible super |
| Division 293 tax rate | 15% | This is the extra tax applied under the rules | Apply it only after identifying the correct taxable amount |
| Concessional contributions | Cap is $30,000 for 2025–26 | These contributions can form part of the taxable amount | Reconcile employer, salary sacrifice, and personal deductible contributions |
| Salary sacrifice contributions | Included as low tax contributions | They commonly increase Division 293 exposure | Check payroll summaries and fund reporting before year end |
| Personal deductible super contributions | Included if claimed as a deduction | A deduction can improve one tax position and worsen another | Model both outcomes before lodging the notice of intent |
| ATO assessment | Issued separately by the ATO | Your own estimate is only a planning tool | Wait for the assessment and review the figures carefully |
Use any calculator as a starting point, not a final answer. The rules can be less straightforward for defined benefit interests, unusual reporting items, and years with amended returns. Check the current ATO material and get personal advice before acting.
Understanding Your Division 293 Income and Contributions
The hard part is rarely the formula. It is deciding which amounts belong in the calculation, which ones do not, and which figures are still incomplete at year end.
What counts as Division 293 income
For Division 293 purposes, income is broader than the taxable income figure on your return. The ATO income test can include taxable income, reportable fringe benefits, total net investment losses, reportable super amounts, and other amounts the legislation brings into the test in specific cases. If you rely on salary alone and ignore the add-backs, your estimate can be materially wrong.
These are the inputs I check first with high-income clients:
- Taxable income, as the starting point
- Reportable fringe benefits, which often matter for executives and some salary package arrangements
- Total net investment losses, including relevant rental or investment gearing losses
- Reportable employer super contributions, where they appear in the reporting
- Low tax contributions, because they are added into the broader Division 293 income test
- Other special amounts, if your circumstances involve defined benefits, death benefits, or less common ATO adjustments
The practical issue is timing. Payroll reports, fund reporting, and your tax return do not always line up neatly. A calculator gives a useful estimate, but it will not resolve technical issues like trust distributions, amended assessments, or defined benefit interests. For the current rules and edge cases, check the ATO’s guidance on Division 293 tax on super contributions.
What counts as Division 293 super contributions
The extra Division 293 tax applies to low tax contributions. In plain terms, that usually means concessional contributions that have already received concessional tax treatment in super.
Common examples include:
- Employer Superannuation Guarantee contributions
- Salary sacrifice contributions
- Personal contributions for which you claim a tax deduction
- Certain defined benefit or notional taxed contributions, where special rules apply
After-tax non-concessional contributions are generally outside Division 293. That point matters, but it should not drive strategy on its own. A non-concessional contribution avoids Division 293, yet it also gives up the personal deduction and may create different cash flow and contribution cap issues.
Clients often miss one trade-off here. A personal deductible contribution can reduce personal taxable income and still increase Division 293 exposure because the contribution itself is part of the low tax contribution pool. That is why I usually model both positions before a notice of intent is lodged.
If you run your own fund or want to understand how these records flow through an SMSF, it helps to review the broader reporting obligations around SMSF accounting and compliance.
Non concessional contributions do not attract Division 293 tax. They are not automatically the better option. The right choice depends on your marginal tax rate, available caps, cash flow, and whether the contribution still meets your broader super plan.
Excess concessional contribution treatment, defined benefit calculations, and amended return outcomes can all change the result. Check current ATO guidance and get personal tax advice before acting.
How to Calculate Your Estimated Division 293 Tax
A client on a strong salary can still be caught off guard here. The usual pattern is simple. PAYG income looks manageable, concessional contributions build through the year, and the Division 293 liability only becomes obvious once you run the numbers properly.
A calculator is useful, but only if the inputs match the ATO rules. In practice, that is where estimates go wrong. Clients often enter salary and employer super, then miss fringe benefits, reportable employer super contributions, or other adjustments that push them over the threshold.
Division 293 calculator formula
Formula
Division 293 tax = 15% × lower of:
- Amount above the threshold
- Division 293 super contributions
That formula is the easy part. The main task is identifying the right income figure and the right concessional contribution amount for the year.
Step by step method
- Estimate your Division 293 income, not just your taxable income.
- Include reportable fringe benefits if they apply.
- Include reportable employer super contributions where relevant.
- Include net investment losses and other income test adjustments that affect the calculation.
- Work out your low tax contributions, usually your concessional contributions for the year, subject to the specific ATO rules.
- Add Division 293 income and relevant contributions together.
- Compare the total with the Division 293 threshold.
- Work out the excess over the threshold.
- Apply 15% to the lower of the excess or the relevant contributions.
- Treat the result as an estimate only until the ATO issues the formal assessment.
If you are already projecting year end tax, an income tax calculator for Australian taxable income estimates can help you sense-check the income side before you calculate the extra super contributions tax.
Worked example
Michael has taxable income of $240,000. His employer makes $18,000 of concessional contributions and he salary sacrifices $12,000. His relevant total for this estimate is $270,000. That puts him $20,000 above the $250,000 threshold. His relevant concessional contributions are $30,000.
The lower amount is $20,000.
Estimated Division 293 tax is 15% of $20,000, which is $3,000.
This result is common for clients who are only slightly over the threshold. The full contribution amount does not always get taxed at the extra 15%. Only the lower of the excess or the contribution pool is used.
Example where contributions cap the result
Priya has Division 293 income of $280,000 and relevant concessional contributions of $25,000. Her combined total is $305,000. The excess over the threshold is $55,000, but her contribution amount is only $25,000.
The lower amount is $25,000. Her estimated Division 293 tax is $3,750.
This is why a basic calculator can be misleading if you use it as a yes or no tool. The better approach is to model the size of the liability, test whether extra salary sacrifice still makes sense, and check the cash flow impact before year end. Defined benefit interests, excess concessional contribution issues, and amended return outcomes can all change the final position, so confirm the current ATO treatment and get personal advice before acting.
Managing Your Division 293 Assessment
A common client scenario is simple. The calculator estimate looks manageable in June, then the ATO notice arrives much later, after cash has already been committed elsewhere. Division 293 often becomes a cash flow problem before it becomes a tax problem.
The assessment is issued separately from your normal income tax assessment. It is based on your lodged return and contribution information reported to the ATO by your super fund. That timing catches high income earners off guard, especially where bonuses, amended returns, or late fund reporting change the final position.
How payment usually works
Once the assessment is issued, you generally have two broad choices. Pay it from personal cash flow, or elect to release money from super if you are eligible and the ATO process allows it. The practical decision is not just about tax. It is about liquidity, investment plans, debt reduction, and whether you want to keep more money inside the concessional super environment.
The ATO explains the release authority process for Division 293 tax, including how a super fund can pay an amount to the ATO from your super balance if you choose that option (ATO release authority information for Division 293 tax). Time limits apply, so do not leave the notice sitting in myGov or with unopened mail.
In practice, I tell clients to treat the assessment as an action item the day it arrives. If you want to pay from super, fund processing time matters. If you want to pay personally, confirm the due date and protect the cash early.
Why your assessment may change
Division 293 assessments can be amended. The usual triggers are an amended income tax return, corrected employer reporting, reclassified contributions, or super fund data being updated after the first assessment issues.
That matters for planning. A calculator helps you estimate exposure, but it will not always match the final notice if the inputs move after year end.
Common mistakes and fixes
- Mistake: Treating the first estimate as the amount you will definitely pay
Fix: Use the estimate for planning, then reconcile it against the ATO assessment and any later amendment.
- Mistake: Missing the notice because it arrives after the income tax assessment
Fix: Check ATO correspondence, myGov messages, and adviser mail regularly after lodgment.
- Mistake: Paying from super without considering the trade-off
Fix: Compare the effect on retirement savings against the benefit of preserving personal cash.
- Mistake: Paying personally without checking short-term cash needs
Fix: Review upcoming tax instalments, loan commitments, and planned investments before choosing the payment method.
- Mistake: Assuming contribution figures are final
Fix: Cross-check fund reporting, payroll records, salary sacrifice amounts, and any personal deductible contribution notices.
- Mistake: Ignoring amended assessments
Fix: Recheck the calculation if your tax return changes or your fund corrects contribution data.
- Mistake: Treating a calculator as a substitute for advice in a defined benefit or complex contribution case
Fix: Confirm the ATO treatment and get personal advice before acting.
A Division 293 calculator is useful for forecasting and decision-making. The legal liability is the amount on the ATO assessment, as amended if your facts change.
Check current ATO guidance before you respond to an assessment. If the numbers do not reconcile to your records, get the mismatch reviewed before you pay or elect a super release.
Proactive Tax Planning and Professional Guidance
A Division 293 calculator is most useful before the year ends, not after the assessment arrives. Its primary value lies in testing decisions while you can still control them. That includes how much to salary sacrifice, whether to claim a personal super deduction, and whether a one-off event such as a bonus, asset sale, or large fringe benefit is likely to push you into Division 293.
For high-income earners, the trap is rarely the formula itself. The trap is timing. Concessional contributions can make sense for long-term tax and super planning, but they can also create a later Division 293 liability that does not show up in your normal PAYG withholding. If cash flow is tight, or if several moving parts hit in the same year, that separate tax bill can be inconvenient at best and expensive at worst.
A better approach is to review Division 293 as part of your broader tax planning services in Australia before 30 June, then check the numbers again once your contribution data and year-end income are clearer.
Year end review points
Use your calculator estimate to pressure-test the issues that commonly change the outcome:
- Expected taxable income for the year
- Bonuses, commissions, and deferred remuneration
- Capital gains from shares, crypto, or property
- Reportable fringe benefits
- Reportable employer super contributions
- Net investment losses, including rental losses
- Employer super contributions across all funds
- Salary sacrifice amounts
- Personal deductible super contributions
- Any change in work pattern, payroll, or fund reporting
- Whether the estimate still makes sense after year-end adjustments
This review is not just about working out tax. It helps you decide whether an extra concessional contribution still achieves the result you want after allowing for Division 293, contribution caps, and your short-term cash position.
When professional advice adds value
Advice is usually worth getting where the position is close to the line or the facts are messy. That includes cases where income fluctuates, contributions come from more than one source, or the numbers reported by payroll and super funds do not line up cleanly.
Get personalized advice if any of these apply:
- Income is near the Division 293 threshold
- You receive irregular bonuses or commissions
- You salary sacrifice and also make personal deductible contributions
- You sold investments during the year
- You have negative gearing or other investment losses
- You have multiple employers or multiple super funds
- You are a member of a defined benefit fund
- You are planning a large deductible contribution near year end
- You want to compare paying personally against using a release from super
- You need to check whether the expected tax outcome still supports the contribution strategy
In practice, I find clients get the best result when Division 293 is treated as part of a full-year planning discussion, not as a last-minute calculator exercise. Sometimes the right answer is to keep contributing because the long-term super strategy still stacks up. Sometimes the better call is to reduce or defer a contribution, preserve cash, or avoid creating a tax cost that adds little benefit.
General information is not personal tax or financial advice. Check current ATO guidance and get advice specific to your circumstances before you act, especially if you have defined benefit interests, amended contribution figures, or complex income items.
FAQs
A calculator gives you a useful estimate. The critical work starts when you test whether the inputs match what the ATO and your fund will ultimately report.
Does Division 293 apply if I have no concessional contributions
No. Division 293 only applies to taxable concessional contributions for the year. If there are no concessional contributions, there is no Division 293 liability, even if your income is high.
What counts as concessional contributions
Concessional contributions usually include employer contributions, salary sacrifice amounts, and personal contributions for which you claim a tax deduction. The exact treatment can turn on timing, fund reporting, and whether a deduction was validly claimed.
Caps and super guarantee rates can change, so check the current year rules before relying on any estimate. For year specific figures, use current ATO material or get advice if you are contributing close to the cap.
Are after-tax contributions counted for Division 293
No. Non-concessional contributions are generally outside Division 293.
That said, clients often confuse contribution type with contribution source. A personal contribution is not automatically non-concessional. If you claim a deduction for it, it is treated as concessional and can affect Division 293.
What if my income is below the threshold on its own
Division 293 can still apply. The test looks at your Division 293 income plus your relevant low-tax contributions.
In practice, this catches people whose base income sits under the threshold but who also receive employer super, salary sacrifice, or make deductible personal contributions. In those cases, the tax may apply to part of the concessional contribution amount rather than all of it.
Do defined benefit fund members need extra care
Yes. Defined benefit interests need a closer review because the contribution amount used for Division 293 is often a notional amount rather than a cash contribution shown on a normal transaction list. Payment timing and release options can also work differently.
A generic calculator often misses that. If you are in a defined benefit scheme, check the assessment carefully before you decide how to deal with it.
Is a Division 293 calculator enough on its own
It is a planning tool, not a final answer. Good calculators help you estimate exposure and model different contribution choices, but they do not replace the ATO assessment or fix bad inputs.
The common failure points are practical ones. Wrong contribution totals. Missed deductible personal contributions. Multiple funds reporting at different times. Income figures that changed after an amendment or year-end adjustment. That is why I treat a calculator as the first pass, then compare it against payroll records, contribution data, and the eventual assessment.
If you want help reviewing a Division 293 assessment, checking your concessional contributions, or planning before year end, Nanak Accountants and Associates can assist with practical tax guidance, super contribution reviews, and compliance focused support across Australia.
General information only. Check current ATO guidance and get personal tax advice before acting, especially if your income is close to the threshold, you have multiple contribution sources, or you are a defined benefit member.
