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Celia, 50, a partner in a Sydney law firm, has income for Division 293 purposes of A$260,000 in 2026-27 before her super contributions are added. Her concessional contributions for the year are A$30,000, within her cap. The amount of her contributions on which Division 293 tax is payable is…
Division 293 tax of 15% applies to the lesser of the person's concessional contributions and the amount by which their income plus those contributions exceeds the A$250,000 threshold (ATO, Division 293 tax, updated 7 Aug 2026). Celia's income plus contributions is A$290,000, which is A$40,000 over the threshold, and the lesser of A$40,000 and A$30,000 is A$30,000. Her extra tax is therefore 15% of A$30,000, or A$4,500. A$10,000 measures her income alone against the threshold and leaves out the contributions. A$20,000 nets the A$10,000 off the contributions, which the rule never does. A$40,000 is the excess over the threshold, not the lesser of the two amounts.
Division 293 applies to the LESSER of the excess and the contributions.
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