What’s the answer to the simple question “What’s the Div 296 tax on $200k?” Most will answer $30k. It’s easy, just apply 15% tax to the $200k and you have your answer – but it’s not as simple as that. The correct answer is “It depends!”
This table considers 4 scenarios at different TSBs, each with $200k in Div 296 earnings.
- no contributions or withdrawals
- a $300k downsizer contribution and no withdrawals
- no contributions and a $300k withdrawal
- a $300k downsizer contribution and a $300k withdrawal
| Scenario | 30/6/25 TSB | Contributions | Withdrawals | 30/6/2026 TSB | Earnings | % Taxable | $ Taxable | Tax |
| 1 | $3,000,000 | $0 | $0 | $3,200,000 | $200,000 | 6.25% | $12,500 | $1,845 |
| 2 | $3,000,000 | $300,000 | $0 | $3,500,000 | $200,000 | 14.29% | $28,580 | $4,287 |
| 3 | $3,000,000 | $0 | $300,000 | $2,900,000 | $200,000 | 0.00% | $0 | $0 |
| 4 | $3,000,000 | $300,000 | $300,000 | $3,200,000 | $200,000 | 6.25% | $12,500 | $1,845 |
| 1 | $5,000,000 | $0 | $0 | $5,200,000 | $200,000 | 42.31% | $84,620 | $12,693 |
| 2 | $5,000,000 | $300,000 | $0 | $5,500,000 | $200,000 | 45.45% | $90,900 | $13,635 |
| 3 | $5,000,000 | $0 | $300,000 | $4,900,000 | $200,000 | 38.78% | $77,560 | $11,634 |
| 4 | $5,000,000 | $300,000 | $300,000 | $5,200,000 | $200,000 | 42.31% | $84,620 | $12,693 |
| 1 | $10,000,000 | $0 | $0 | $10,200,000 | $200,000 | 70.59% | $141,180 | $21,177 |
| 2 | $10,000,000 | $300,000 | $0 | $10,500,000 | $200,000 | 71.43% | $142,860 | $21,429 |
| 3 | $10,000,000 | $0 | $300,000 | $9,900,000 | $200,000 | 69.70% | $139,400 | $20,910 |
| 4 | $10,000,000 | $300,000 | $300,000 | $10,200,000 | $200,000 | 70.59% | $141,180 | $21,177 |
Interestingly none of these answers is $30k. Also note that, even though contributions and withdrawals are not included in Div 296 earnings, they do affect the percentage of the earnings that incurs tax.
If you would like to consider your own scenarios you can access our Div 296 FAQ, which includes a calculator. You can even embed it in your own web page if you wish.
