• Paying Division 293 tax

    The individual is liable for their Division 293 tax.

    The individual will receive a Division 293 tax assessment if they have taxable contributions for an income year.

    To have taxable contributions:

    • an individual's income for Division 239 tax purposes, plus
    • their low-tax contributions
    • needs to be greater than $300,000.

    Note: The amount of taxable contributions will be the lesser of the low-tax contributions and the amount above the $300,000 threshold.

    The individual will be liable to pay 15% of the taxable contributions.

    Example 1

    Mark has income for Division 293 tax purposes of $325,000 and low-tax contributions of $25,000. His taxable contributions are the lesser of:

    • the low-tax contributions, which equal $25,000, and
    • the amount above the threshold, which is equal to $50,000 (Income + Contributions - threshold = $325,000 + $25,000 - $300,000).

    Mark's taxable contribution amount is $25,000. His Division 293 tax will be $3,750.

    End of example

      

    Example 2

    Jennifer has income for Division 293 tax purposes of $290,000 and her low-tax contribution amount is $25 000. Her taxable contributions will be the lesser of:

    • the low-tax contributions $25,000, and
    • the amount above the threshold which equals $15,000 (Income + Contributions - Threshold = $290,000 + $25,000 - $300,000).

    Jennifer's taxable contribution amount is $15,000. Her Division 293 tax will be $2,250.

    End of example
      Last modified: 06 May 2015QC 36275