Division 296 Tax Calculator
About This Calculator
This calculator estimates the Division 296 tax liability that applies to superannuation members with a total super balance exceeding $3 million. Division 296 introduces a two-tiered additional tax on earnings: 15% on the proportion attributable to balances between $3 million and $10 million, and an additional 10% on the proportion above $10 million. Div 296 tax has made superannuation less tax effective however that does not mean that it is less effective than alternative investment choices. Our Div 296 modelling tool investigates the alternatives.
Note: this calculator estimates Year 1 (2026-27) Div 296 tax based on the closing total super balance at 30 June 2027. From 2027-28 onwards, the threshold test is the greater of opening and closing TSB for the year.
Important:
This calculator is provided for educational and illustrative purposes only. It does not constitute financial, taxation, or legal advice. The calculations are based on simplified assumptions and may not reflect your specific circumstances. Always obtain professional advice before making decisions based on these calculations.
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Division 296 Tax Report
Overview
Division 296 of the Income Tax Assessment Act 1997 introduces an additional tax on superannuation earnings for members with a total super balance exceeding $3 million at the end of the financial year. The tax applies to the member personally, not to the superannuation fund, though the member may elect to have the tax paid from their superannuation account.
The Two-Tier Structure
The tax operates in two tiers. The first tier applies an additional 15% tax on the proportion of earnings attributable to the balance between $3 million and $10 million, bringing the effective total tax rate on those earnings to approximately 30%. The second tier applies an additional 25% (15% + 10%) on the proportion of earnings attributable to the balance above $10 million, bringing the effective total tax rate on those earnings to approximately 40%.
Both thresholds are indexed annually. The proportion of the total super balance exceeding each threshold determines what fraction of the member's earnings is subject to the relevant tax rate.
The Calculation
The tax liability is calculated in three steps:
- Step 1: Calculate the proportion of the total super balance (TSB) exceeding $3 million: (TSB - $3,000,000) ÷ TSB
- Step 2: Calculate the proportion of the TSB exceeding $10 million: (TSB - $10,000,000) ÷ TSB
- Step 3: Tax Liability = (15% x Earnings x Proportion over $3m) + (10% x Earnings x Proportion over $10m)
Results
