3.4 Calculating Division 293 Tax
The following diagram sets out how to calculate Division 293 tax.
TC: taxable contributions
ISP: income for surcharge purposes
RSC: reportable super contributions
LTC: low-tax contributions
LTCA: low-tax contributed amounts
ECC: excess concessional contributions.
3.5 Rate of Division 293 Tax
Division 293 tax applies at a rate of 15% of a person's taxable contributions for an income year.
Example 3.4 (continued from Example 3.1)
David had an income for surcharge purposes of $315,000 and his taxable contributions have been worked out as $25,000.
So, the Division 293 tax calculation is as follows:
End of example
- Taxable contributions x 15%
- $25,000 x 15%
- = $3,750.
Generally, the maximum amount of Division 293 tax that can be levied on accumulation interests in the 2012–13 income year is $3,750, due to the maximum cap for concessional contributions being $25,000.
In the 2013–14 income year, it was $5,250, due to the increased cap of $35,000 for people 59 years old and over on 30 June 2013.
If a person has contributions disregarded under Division 291 or 292 (for example, contributions made to a CPF or disregarded by the Commissioner of Taxation exercising his discretion) then a higher amount of Division 293 tax may be levied. Members of a defined benefit fund can also have a higher liability because Division 293 tax may be calculated on notional contributions which are not capped.
Division 293 tax
The following table outlines how to calculate Division 293 tax and what an individual will receive from the ATO when assessed.
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Division 293 scenario table