What is Division 293 tax? Video transcript

Division 293, or Div 293, is a tax on the super of higher income earners.

This short video outlines who it affects and how it is calculated.

Generally, if your income plus your before-tax super contributions are greater than $300,000, you’ll need to pay a 15% tax on the contributions over $300,000.

However, to see whether you need to pay Div 293, we calculate your income and super a bit differently.

Your income is calculated as your taxable income plus other adjustments, such as reportable fringe benefits and investment losses.

Your super is calculated as concessional contributions, minus any contributions above the concessional contributions cap.

If you’re a member of a defined benefit super fund, such as some government funds, special rules apply, because an estimate is used to calculate your super.

Your income and super for Div 293 are added together, and if the total is over $300,000, you’ll need to pay a tax of 15% on the super over $300,000.

If you owe Div 293 tax, you can choose to pay it out of your own money or from your super fund.

For more information, go to ato.gov.au/division293

    Last modified: 01 May 2015QC 44988