Division 293 tax: the extra 15% on super for high earners
If your income is high enough, the tax break on super contributions shrinks. Here is how Division 293 works, who it hits, and why salary sacrifice can still be worth it.
Salary sacrificing into super is normally taxed at a flat 15% — a big saving if your marginal rate is 30% or more. But once your income climbs past a certain point, an extra tax called Division 293 kicks in and halves that advantage. Here is exactly how it works for 2026-27.
What Division 293 is
Division 293 is an additional 15% tax on concessional (before-tax) super contributions for high-income earners. It sits on top of the standard 15% contributions tax, so affected contributions are effectively taxed at 30% rather than 15%.
Who pays it
You pay Division 293 if your income plus your concessional contributions exceeds $250,000 in the year (this threshold is not indexed, so it stays $250,000 for 2026-27). "Income" here is a broad measure — roughly your taxable income plus reportable fringe benefits, net investment losses and your concessional contributions.
How much you pay
The extra 15% applies to the lesser of your concessional contributions or the amount by which your combined income exceeds $250,000. So if you are $10,000 over the threshold but contributed $30,000, the 15% applies to $10,000, not the full $30,000.
Why sacrificing can still be worth it
Even at an effective 30%, salary-sacrificed contributions are still taxed below the top marginal rate of 47% (including Medicare). So for most high earners the strategy remains worthwhile — the benefit is simply smaller than it is for someone on a 30% or 37% marginal rate.
How you pay it
You do not pay Division 293 through your payslip. The ATO issues an assessment after you lodge your return, and you can choose to pay it personally or release the money from your super fund to cover it.
Worked example
Sarah earns $260,000 and salary sacrifices $25,000 into super. Her income plus contributions is $285,000 — $35,000 over the $250,000 threshold. Division 293 applies to the lesser of her contributions ($25,000) or the excess ($35,000), so the extra 15% falls on the full $25,000 — an added $3,750. Her contributions are effectively taxed at 30% rather than 15%. Even so, that $25,000 avoided her 47% marginal rate, so sacrificing still left her well ahead.
See your salary sacrifice after tax
Model take-home pay, super and the contributions tax — with the 2026-27 cap and Division 293 threshold built in.
This is general information, not personal advice. For the caps and how sacrificing works more broadly, see our guide on salary sacrificing into super in 2026-27.
Frequently asked questions
Does everyone earning over $250,000 pay Division 293?
Not quite — the test is your income plus your concessional super contributions. Someone on $245,000 who makes $30,000 of concessional contributions crosses $250,000 and pays some Division 293, while someone on $250,000 with no extra contributions may pay little or none.
Can I avoid Division 293 tax?
If your combined income and contributions genuinely exceed $250,000, the tax applies. You could contribute less, but that gives up the concessional treatment — usually not worth it, since an effective 30% still beats the top marginal rate.
How do I pay it?
The ATO sends a Division 293 assessment after you lodge your return. You can pay it from your own pocket or elect to release the amount from your super fund.
Does Division 293 make salary sacrifice pointless?
No. At an effective 30%, sacrificed contributions are still taxed well below the 47% top marginal rate, so the strategy usually remains worthwhile — just with a smaller benefit than for middle earners.