Division 293 (Div 293) tax is an additional tax applied to certain superannuation contributions made by high‑income earners. It is designed to reduce the tax advantage received on concessional (before‑tax) super contributions by individuals with higher incomes.
If your income plus concessional super contributions exceed $250,000 in a financial year, Div 293 tax may apply. Where it does, an extra 15% tax is charged on some or all of your concessional contributions. This effectively increases the tax on those contributions from 15% to up to 30%.
Div 293 applies to concessional contributions such as employer super guarantee contributions and salary sacrifice amounts, but does not apply to non‑concessional (after‑tax) contributions. The Australian Taxation Office (ATO) calculates the tax after the end of the financial year and issues an assessment. Individuals can choose to pay the tax personally or release the amount from their super fund.
While Div 293 doesn’t affect everyone, it’s an important consideration for higher‑income earners when planning remuneration and superannuation strategies.
Please do not hesitate to contact our office on 08 9387 5637 if you have any questions about Division 293.
