The ATO sent me a Division 293 notice — why is there an extra 15% tax on my super?

You lodged in early July. The refund came through. Then somewhere in the middle of August a letter appears in myGov headed Additional tax on concessional contributions (Division 293), with an amount owing attached to it. The two reactions are always the same: did I get something wrong, or is this a scam?

Usually neither. Division 293 is a separate tax that sits alongside income tax. What it taxes is your super contributions for the year rather than your salary, and it cannot be calculated at the moment you lodge. The ATO issues the assessment once it holds two things — your tax return, and the contribution information reported by your super fund. That is why it runs a step behind the refund, and why August and September are when most of these letters land.

What the 15% is actually charged on

The test adds two figures together: your Division 293 income and your Division 293 super contributions. If the combined amount is more than $250,000, the tax can apply. The rate is 15%, but it is not 15% of all your contributions — it is charged on whichever is smaller, the amount by which you went over the threshold, or your taxable super contributions.

The ATO's own worked example: Division 293 income of $240,000 and super contributions of $15,000, a combined $255,000. The excess over the threshold is $5,000 and the contributions are $15,000, so the taxable contributions figure is the lesser of the two — $5,000. The tax is 15% of that, or $750.

Where the 15% comes from is worth knowing. Concessional contributions — employer super guarantee, salary sacrifice, and personal contributions you have claimed a deduction for — are taxed at 15% inside the fund. Division 293 adds a second 15% to the slice caught by the test, taking that slice to 30%. The measure halves the concession for higher earners; it does not remove it.

The $250,000 threshold is not indexed, and super guarantee has been at 12% since 1 July 2025. Take a hypothetical employee on a $225,000 salary with no other income and no deductions: employer contributions alone are $27,000, the combined figure is $252,000, and the assessment is 15% of the $2,000 excess — $300. A small number, but that is where most people meet this tax for the first time.

The rental loss gets added back

Division 293 income uses the same income calculation as the Medicare levy surcharge, disregarding reportable superannuation contributions. On top of taxable income it adds reportable fringe benefits, net financial investment loss, net rental property loss, and any amount on which family trust distribution tax has been paid.

Net rental property loss is the line that surprises people. Negative gearing pulls your taxable income down and does nothing whatsoever for this threshold, because the loss is added straight back before the $250,000 comparison is made. A geared share portfolio running at a net financial investment loss is treated the same way. Using property losses to duck under this line simply does not work.

The other common trigger is a one-off year. The ATO specifically lists an eligible termination payment, a back payment of salary or wages, a capital gain, or an income increase for any other reason as events that can lift someone over the line for a single year. Selling an investment property held for a long time is the version of that we see most often.

What to do once the notice arrives

There are two ways to pay: with your own money, or by releasing the amount from super. To use super you lodge an election — in ATO online services under Super, then Manage, then Division 293 election, or through your tax agent. You have 60 days from the date of the assessment to make it.

The trap sits inside those 60 days. The ATO states plainly that the extra time is for making the decision only, and that it does not change the due date on the notice. Even if you intend to fund the tax out of super, the liability should still be paid by the date printed on the assessment. An election, once lodged, cannot be withdrawn or reversed.

If you hold more than one super account and a fund reports its contributions after you had already lodged, an amended Division 293 assessment can turn up later. A second letter does not mean the first one was wrong.

It is also worth knowing what cannot be argued. The ATO has no discretion to disregard or reallocate contributions for the Division 293 calculation the way it does for excess contributions. And if you apply to have excess concessional contributions disregarded or reallocated to another year and the ATO agrees, those amounts are added back into the Division 293 calculation regardless.

A sensible order of work, as at August 2026: check the two figures on the notice — Division 293 income and Division 293 contributions — against your return and your fund's annual statement; work out whether a one-off event pushed you over for that year; then decide where the money comes from.

This is general information rather than advice about your own circumstances. The concessional contributions cap is $32,500 from 1 July 2026, and for anyone sitting near the $250,000 line, how much salary sacrifice makes sense is an arithmetic question rather than a rule of thumb. Our income tax calculator will show you the taxable income side of it, and checking assessments like this one is part of what our individual tax return service covers.