Division 293 calculation explained
We use the following information to assess whether you’re liable to pay Division 293 tax:
- your tax return to determine your Division 293 income
- contribution information reported to us by your super fund to determine Division 293 super contributions.
Assessments for Division 293 tax are issued once we have all the required information.
Note: If you have more than one fund and it reports contributions for you after you have lodged your tax return, you may receive an amended Division 293 tax assessment.
Division 293 tax will apply to you if you have taxable super contributions in an income year.
You will have taxable super contributions if your combined Division 293 income and Division 293 super contributions exceed the Division 293 threshold. Your Division 293 tax is 15% of your taxable super contributions.
From 1 July 2017, the threshold at which a Division 293 tax calculation will result in an assessment being issued is $250,000. For 1 July 2012 to 30 June 2017, the threshold is $300,000.
Division 293 income
The income component of the Division 293 tax calculation is based on the same income calculation used to determine if an individual needs to pay the Medicare levy surcharge (MLS), disregarding any reportable superannuation contributions reported on the tax return.
The components of this income calculation are:
- taxable income (assessable income minus allowable deductions)
- total reportable fringe benefits amounts
- net financial investment loss
- net rental property loss
- net amount on which family trust distribution tax has been paid
- super lump sum taxed elements with a zero tax rate
- assessable first home super saver released amount.
These amounts are added up (except the super lump sum and assessable first home super saver released amount, which are subtracted) to give the income amount.
Example: Income component
David reports the following amounts on his tax return:
- taxable income of $290,000
- total reportable fringe benefits of $10,000
- net amount on which family trust distribution tax has been paid of $15,000.
This gives David an income component for Division 293 tax purposes of $315,000.
End of example
Division 293 super contributions
Division 293 super contributions equal an individual's concessional contributions minus any excess concessional contributions. The concessional contributions counted for Division 293 tax purposes generally include:
- employer contributed amounts
- other family and friend contributions
- assessable foreign fund amounts
- assessable amounts transferred from reserves
- personal contributions for which you have been allowed a deduction
- defined benefit contributions.
These contributions are concessionally taxed at 15% within the super fund.
Example: Excess concessional contributions
David has Division 293 super contributed amounts of $40,000.
David has a concessional contribution cap of $25,000 – as a result, he has excess concessional contributions of $40,000 − $25,000 = $15,000.
David’s Division 293 super contributions are his concessional contributions ($40,000) minus his excess concessional contributions: $40,000 − $15,000 = $25,000.
End of example
Taxable super contributions
The total taxable super contributions amount is not the same as Division 293 super contributions. Taxable contributions are the lesser of the Division 293 super contributions and the amount in excess of the threshold.
Example: Lesser amount
For the 2020-21income year, David had Division 293 income of $315,000 and Division 293 super contributions of $25,000.
The amount of taxable contributions is the lesser of either:
- the amount of Division 293 super contributions = $25,000, or
- the amount of income and Division 293 super contributions above the threshold = $315,000 + $25,000 = $340,000 − $250,000 = $90,000.
As a result, the amount of David’s taxable contributions for the 2020-21 income year is $25,000 because it is the lesser of the two amounts.
End of example