Division 293 Super Tax (2024–25)

If your income is on the higher side, you may receive an additional ATO assessment called Division 293 tax. It exists to reduce the extra tax advantage high-income earners get on concessional (pre-tax) super contributions.

What is Division 293 tax?

Division 293 is an extra 15% tax applied to (some or all of) your concessional super contributions when your Division 293 income plus concessional contributions is over $250,000 in a financial year. Put simply: cross the $250k line and an extra 15% may apply.

What counts in the calculation?

• Division 293 income is largely based on the income calculation used for the Medicare levy surcharge. It includes your taxable income plus items such as total reportable fringe benefits, net rental property losses and net financial investment losses; certain super lump sum amounts and FHSS released amounts are subtracted.

• Division 293 super contributions are your concessional contributions (employer SG, salary sacrifice, and personal deductible contributions), ignoring any excess contributions.

• The tax itself is 15% of the lesser of (a) your taxable super contributions, or (b) the amount you exceed the $250,000 threshold.

2024–25 updates you should know

• The concessional contributions cap is $30,000 from 1 July 2024. This cap covers employer SG, salary sacrifice and personal deductible contributions combined.

• The Superannuation Guarantee (SG) rate your employer must pay is 11.5% for 2024–25.

Tip for planning: If your total super balance was under $500,000 at the previous 30 June, you may be able to carry forward unused concessional caps from the past five years—handy for timing contributions, but remember they still count for Division 293 purposes.

When Division 293 might apply (even if your taxable income is under $250k)

Because the ATO adds back things like net rental losses, you can tip over the threshold even with taxable income below $250k. One-off events—large capital gains, bonuses or termination payments—can also push you across for just one year.

Quick example (FY2024–25)

• Salary: $230,000

• Employer SG + salary sacrifice: $20,000 (within the $30,000 cap)

• Net rental loss: $10,000

Division 293 income = $230,000 + $10,000 = $240,000
Add concessional contributions $20,000 → combined amount = $260,000
Excess over threshold = $10,000 → taxable contributions for Division 293 = the lesser of $20,000 (concessional) or $10,000 (excess) = $10,000
Division 293 tax = 15% × $10,000 = $1,500. (Methodology per ATO.)

How and when you’ll be notified

The ATO issues a Division 293 notice of assessment after it has both your tax return and your super fund’s contribution reporting. You’ll receive it in myGov (or by post) and it will show the amounts used and your payment due date.

Paying your Division 293 tax

You have two practical options:

Option 1: Pay personally

Pay via BPAY/credit card/bank transfer by the due date on your notice to avoid interest.

Option 2: Release money from super

You can elect to have money released from your super to pay the assessment. Lodge the election within 60 days of the assessment date via myGov → Super → Manage → Division 293 election (or ask your tax agent to lodge). Your election can’t be withdrawn, and it doesn’t extend the payment due date—so don’t wait if the deadline is close. Your fund generally receives a release authority and then pays the ATO (industry guidance notes funds must act promptly, typically within 10 business days).

Cash-flow tip: If your election processing might run beyond the payment due date, consider paying personally to avoid interest, then reimburse yourself once the release comes through.

Strategies to Consider

• Model your year early. If you’re close to $250k (including add-backs like rental losses), adjust salary sacrifice levels or time personal deductible contributions to stay within your tax and cash-flow targets.

• Use carry-forward caps deliberately. Catch-up contributions can be powerful for small business tax planning or crystallising capital gains years—just remember they still count in the Division 293 calculation.

• Defined benefit members. Division 293 can be deferred to a “debt account” until a benefit is paid, but end-of-year interest may apply—ask for advice before taking benefits.

FAQs

How exactly is the 15% calculated?

It’s 15% of the lesser of your taxable super contributions or the amount by which your income plus contributions exceed $250,000. The ATO includes add-backs such as net rental losses in your Division 293 income.

Does Division 293 apply to all my concessional contributions?

Not always. If you’re only $5,000 over the threshold and your concessional contributions are $20,000, the 15% applies to $5,000 (the lesser amount).

What if my fund hasn’t reported yet?

The ATO waits for both your tax return and your fund’s report. If extra data arrives later (e.g., from another fund), you may receive an amended Division 293 assessment.

I’m in a defined benefit fund—do I still pay now?

You may be assessed, but payment is often deferred to a debt account until you take a benefit; voluntary payments can reduce interest.

Can I change my mind after electing to release from super?

No—elections are irrevocable. Consider cash-flow and timing before lodging.

Need help?

If you expect to cross the $250k threshold in 2024–25—or you’ve received a Division 293 notice—our team can model your options, optimise personal tax outcomes, and design superannuation strategies that stay squarely within ATO compliance. We regularly help executives, medical specialists, and SMSF trustees with: salary-sacrifice tuning, carry-forward cap use, and SMSF setup advice.

Book a call to discuss your situation and a tailored plan for tax savings this year.

General information only. Consider your circumstances and seek personal advice. References: Income Tax Assessment Act 1997 (Div 293) and current ATO guidance. (Australian Taxation Office)