Division 293 (Div 293) is an additional tax on concessional super contributions, which reduces tax concessions for individuals whose combined income & super contributions are over the threshold currently $250,000. Div 293 tax is 15% of your taxable super contributions.
Will I have to pay Division 293?
If your combined income & contributions are over $250,000, the ATO will send you a notice of assessment, once both have been received by the tax office.
The new notice of assessment may be sent after your original notice of assessment was issued, which is generally an amended notice of assessment.
What if my income is over $250,000 for only one year due to termination payout?
There are certain events that may cause your income & contributions to increase over the Div 293 threshold, these include:
- you received an eligible termination payment
- you made a capital gain
- for any other reason your income significantly increases
- you have decided to salary sacrifice some of your income to super.
In these above cases your marginal tax rate for the year increases and the concessions you have received on contributions also increases. The Tax office have put in place the Div 293 tax to reduce these concessions to an equitable level.
Contributions are taxed at 15% in your super fund. If you are a high income earner, your marginal tax rate is higher than the average income earner. When you make concessional contributions you are receiving a larger tax concession. Div 293 imposes an additional tax of 15% to bring the concession back to an amount in line with the average income earner.
Division 293 tax notice of assessment
Income Tax Assessment Act 1997 and Schedule 1 of the Taxation Administration Act 1953
This is your Division 293 tax assessment for the year ended 30 June 2021.
Your additional tax (Division 293 tax) is 15% of your taxable super contributions. Your taxable super contributions are only those Division 293 super contributions that are above the threshold.
|
Division 293 income (see below) |
|
$421,125.00 |
(a) |
|
Division 293 super contributions (see below) |
|
$25,000.00 |
(b) |
|
Combined income and super contributions |
(a) + (b) |
$446,125.00 |
(c) |
|
Less the Division 293 threshold |
|
$250,000.00 |
(d) |
|
Amount above the threshold |
(c) – (d) |
$196,125.00 |
(e) |
|
Taxable super contributions |
the lesser of (b) or (e) |
$25,000.00 |
(f) |
|
ADDITIONAL TAX |
(f) x 15% |
$3,750.00 |
|
Author
Natasa Briffa
