## 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