Division 293 tax
An extra 15% tax on concessional super contributions for people whose combined income exceeds the threshold.
Division 293 exists because the flat 15% contributions tax is worth far more to a high earner than a low one. It restores some balance by charging an additional 15% on concessional contributions for those above the income threshold.
The income test combines your taxable income with your concessional contributions and several other add-backs. If the combined figure exceeds the threshold, the extra tax applies to the lesser of your contributions or the amount above it.
The result is contributions taxed at 30% rather than 15%. That is still below the top marginal rate, so salary sacrificing generally remains worthwhile — just less dramatically so.
Still worth doing, just less so
On a 47% combined marginal rate, a concessional contribution taxed at 30% under Division 293 still saves 17 percentage points compared with taking the money as salary.
The bit people get wrong
The assessment arrives separately from your notice of assessment, often months later, and catches people by surprise. You can pay it personally or elect to release the money from your super fund to cover it.
Common questions
How do I know if I have to pay it?
The ATO assesses it automatically after your return and your fund's contribution reporting are both processed, then issues a separate notice.
Can I pay it from my super?
Yes. You can lodge a release authority allowing the fund to pay the tax, which avoids having to find the cash from outside super.
Does it make salary sacrifice pointless?
No. Even at 30%, contributions are taxed well below the top marginal rate of 45% plus Medicare levy, so the strategy still produces a meaningful benefit.