Most Australians pay 15% tax on their super contributions. High earners pay 30%. That extra 15% is Division 293, and it kicks in the moment your income plus concessional super contributions cross $250,000.
The policy intent: super contributions are already taxed at a concessional rate (15% vs your marginal rate of up to 47%). For someone on $300,000, that concession saves them 32 cents per dollar contributed. Division 293 halves this benefit, still a concession, but a smaller one.
How it is calculated
Div 293 taxable amount = the LESSER of:
- Your concessional super contributions for the year, OR
- The amount by which (income + super contributions) exceeds $250,000
Example: Sarah earns $270,000 salary. Her employer contributes $32,500 (12% SG from July 2026). Combined: $302,500.
- Excess over $250,000: $52,500
- Her concessional contributions: $32,500
- Div 293 applies to the lesser: $32,500
- Additional tax: $32,500 × 15% = $4,875
Can you pay it from your super?
Yes. The ATO issues the assessment, and you can elect to have it paid directly from your super fund rather than from your bank account. Most people choose this. It preserves cash flow.
Strategic implications
Div 293 does NOT make super contributions a bad deal. Even at 30% tax, you are still paying less than your marginal rate (47% + 2% Medicare on income above $190,000). The concession shrinks but remains positive. Never stop contributing because of Div 293.
