Division 293 Tax: The Extra 15% Super Tax on High Income Earners

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Above $250,000 in combined income and contributions, every dollar of concessional super contribution is taxed at 30%, not 15%.

For anyone accelerating toward FIRE with heavy salary sacrifice, this threshold arrives sooner than the headline “$250K” figure suggests — and the surprise usually shows up as an unexpected ATO bill, not a payslip deduction.

What Division 293 Actually Taxes

Division 293 tax adds an extra 15% on top of the standard 15% contributions tax, applied to concessional (pre-tax) super contributions once combined income plus those contributions exceeds $250,000 for the 2026–27 financial year. The extra tax applies only to the portion above the threshold, or to the taxable contributions themselves — whichever is less.

The result: concessional contributions above the threshold are effectively taxed at 30% total, rather than the standard 15%.

Why the Threshold Catches People by Surprise

“Combined income for Division 293 purposes” is broader than taxable salary. It includes taxable income, reportable fringe benefits, net investment losses — and critically, the concessional super contributions themselves.

This means someone with a taxable salary of $220,000 who salary sacrifices $30,000 into super has a Division 293 income test result around $250,000, even though their take-home-taxed salary sits comfortably below the headline figure. Heavy salary sacrifice — exactly the strategy used to accelerate a FIRE timeline via the concessional cap discussed in How Much Super Should You Have at 30, 40, and 50? — is the most common way people cross the threshold without realising it in advance.

How the Tax Is Actually Paid

Division 293 tax is assessed separately from income tax, after the ATO processes the relevant financial year’s contributions data. The bill can be paid personally or released from the super fund via an ATO-issued release authority — most people choose the release option, since the tax relates to a super contribution rather than take-home cash.

What This Means for Contribution Planning

Division 293 doesn’t change whether concessional contributions are still worthwhile above the threshold — 30% remains lower than the top marginal tax rate of 47% (including the Medicare levy) for income taxed outside super. It does change the exact tax saving from salary sacrifice at high income levels, which is a mechanical input worth knowing before setting a contribution rate, rather than discovering after an unexpected assessment.

Frequently Asked Questions

What is the Division 293 threshold in 2026?

$250,000 in combined income and low-tax contributions for the 2026–27 financial year. It has remained fixed at this level since 2017, when it was lowered from an original $300,000 threshold set at introduction in 2012, unlike some other super thresholds that index annually.

Does Division 293 apply to employer super contributions?

Yes — all concessional contributions count, including compulsory Superannuation Guarantee contributions and any salary sacrifice, not just voluntary amounts.

Is Division 293 tax the same as the concessional contributions cap?

No. The concessional cap ($32,500 for 2026–27) limits how much can go into super at the concessional tax rate at all. Division 293 is a separate, additional tax on contributions within that cap once combined income crosses $250,000. Both can apply to the same contribution.

Division 293 thresholds and rates are set by legislation and subject to change — figures in this post reflect rules confirmed current as of August 2026. This content is specific to Australian superannuation and tax law.

Written by The Founder — currently employed full-time and building toward $20,000/month in passive income.

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