Div 293 tax: what is it and how does it affect you?

Div 293
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Div 293 tax is applied if you earn over $250,000 in 2021/22 and have concessional super contributions. If you make over $250,000, you will pay an additional 15% tax on concessional super contributions.

What is the process?

A 15% tax may apply to some or all of your concessional contributions (CCs) if your adjusted taxable income exceeds $250,000 in 2021/22. Some earnings from employment and businesses and certain one-off payments, such as redundancy and termination payments, are included in this limit.

There is an additional 15% tax payable on concessional contributions in addition to the standard 15% tax. Many people still benefit from concessional contributions. Despite paying 30% tax on concessional contributions, you pay less tax than high-income earners who are taxed at a top marginal rate of 47% (including levy).

How do I know if I need to pay Div 293 tax? 

Your tax return and the data from your super fund(s) will be used by the ATO to determine if you need to pay Div 293 tax. An assessment notice will be sent to you with the amount of tax payable and the authority necessary for your super fund to release the funds. You can opt to pay the assessment from non-super savings or direct your super fund to pay the assessment from your super balance.

If you have any questions regarding Div 293 tax, please do not hesitate to book a meeting to speak wit us.

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