Division 293 tax
An extra 15% super-contributions tax for high earners.
Division 293 is an extra 15% tax on certain before-tax super contributions for people whose income plus those contributions is over $250,000. It reduces the tax advantage of super at high incomes, so contributions are effectively taxed at 30% instead of 15% — still often below the top marginal rate.
The $250,000 test is on your Division 293 income PLUS your low-tax super contributions, not your salary alone. That distinction is what catches people out: your employer’s guarantee counts, so you can be under $250,000 on your payslip and over the threshold once super is added. Division 293 income starts from taxable income and adds several things back — reportable fringe benefits, net investment losses and some foreign income among them — but it deliberately DISREGARDS reportable super contributions, because those are counted on the contributions side instead. Counting them in both places would tax the same dollars twice. The worked example below is the straightforward case where none of the other adjustments apply.
Worked example
You earn $260,000 and receive the 12% guarantee, $31,200. Division 293 income is $260,000 + $31,200 = $291,200, which is $41,200 over the threshold. The surcharge is 15% of the lesser of that excess and your contributions — 15% of $31,200 — so about $4,680.
Common mistake
Checking your salary against $250,000 and stopping there. Someone on $240,000 is under the threshold on salary and over it once the $28,800 guarantee is counted, so the surcharge applies even though no payslip ever showed $250,000.
Grounded in ATO guidance. Figures last checked . General information, not tax advice.
Questions about this term
Division 293 tax: common questions
- Does Division 293 apply if my salary is under $250,000?
- It can — the test is Division 293 income plus your low-tax super contributions, not salary alone. Someone on $240,000 is under the line on their payslip and over it once the $28,800 guarantee is counted, so the surcharge applies even though no payslip ever showed $250,000. Check the combined figure, not the headline salary.
- How is the Division 293 amount worked out?
- It is 15% of the lesser of your excess over $250,000 and your contributions. Earn $260,000 with a $31,200 guarantee and Division 293 income is $291,200 — $41,200 over the threshold. The contributions are the smaller figure, so the surcharge is 15% of $31,200, about $4,680. That is the straightforward case where no other adjustments apply.
- Does Division 293 make super pointless for high earners?
- Usually not. It lifts the effective tax on the affected contributions from 15% to 30%, which is still often below the top marginal rate the same money would face as salary. The surcharge reduces the tax advantage of super at high incomes rather than removing it.
- Are my salary-sacrificed contributions counted twice in the Division 293 test?
- No — Division 293 income deliberately disregards reportable super contributions, because they are counted on the contributions side instead. Counting them in both places would tax the same dollars twice. Division 293 income starts from taxable income and adds back things like reportable fringe benefits, net investment losses and some foreign income.
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