Reduction in Super Concessions for high income earners

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Reduction in superannuation concessions for high income earners – update!

The Tax Office has provided an update on the contributions calculation for superannuation fund members who are high income earners and subject to Division 293 tax payments.  

  1. The introduction of Division 293 was designed to reduce the superannuation concessions for individual taxpayers who fall within the 45% marginal tax bracket (excluding the temporary budget levy, Medicare levy and Medicare levy surcharge).
  2. Superannuation funds currently pay tax at 15%, which results in a concession of 30%, reflecting the difference between the superannuation tax rate and individual’s marginal tax rate.
  3. An individual is liable to pay the Division 293 tax if his or her income is greater than $300,000 in the year.
  4. The Division 293 tax is charged at 15% of an individual’s taxable concessional contributions but may be modified in specific circumstances.
  5. The contributions calculation will be modified for:
    • Individuals with defined benefit interests;
    • Constitutionally protected state higher level office holders; and
    • Commonwealth justices and judges.
  6. Certain lump sum payments such as lump sums received on retrenchment, most superannuation lump sum payments and termination payments are included in the $300,000 threshold for the purpose of Division 293.
  7. For more information on Division 293, click here.

Check the type of superannuation account you have. Failure to pay the Division 293 tax in full by the due date may result in the application of interest charges. Contact us if you require any clarification or advice.


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