Proposed bill — modelling tool only
Division 296 Tax Calculator Australia
Model the proposed additional 15% tax on superannuation earnings for Total Super Balances over $3 million. Based on the Treasury Laws Amendment (Better Targeted Superannuation) Bill 2024, which has not yet been enacted.
Calculate your Division 296 liability
Enter your Total Super Balance across ALL super funds at the start and end of the financial year, plus any contributions made and benefits paid during the year.
Your total super across all funds at start of the financial year
Your total super across all funds at end of the financial year
Concessional + non-concessional contributions across all funds
Pension payments, lump sum withdrawals, and commutations
5-year Division 296 projection (if bill passes)
Assumes 7% annual investment growth, same contributions and withdrawals each year. The proposed $3M threshold stays fixed. Tax paid each year reduces the following year's balance. All figures are estimates based on proposed, not enacted, legislation.
How Division 296 tax would be calculated (as proposed)
Step 1 — Super earnings
Under the bill, the ATO would not use investment income. It would use the change in your Total Super Balance:
This means unrealised capital gains count as earnings. If your SMSF property rose in value by $150,000 this year, that $150,000 is included in earnings even if the property was not sold. For SMSF trustees with illiquid assets, this creates cash-flow planning challenges.
Step 2 — Proportion above $3 million
Only earnings attributable to the balance above $3M are taxed. If your year-end TSB is $3.5M, the taxable proportion is ($3.5M − $3M) ÷ $3.5M = 14.3%.
Step 3 — Apply 15% tax
This is an additional tax. The 15% contributions tax already paid on concessional contributions is separate. It is possible to be subject to both Division 293 (income over $250k) and Division 296 (balance over $3M) in the same year.
Division 296 vs Division 293 — comparison
| Feature | Division 293 | Division 296 |
|---|---|---|
| Trigger | Income for surcharge purposes > $250,000 | Total Super Balance > $3,000,000 |
| Tax base | Concessional contributions | Super earnings (including unrealised gains) |
| Rate | 15% additional | 15% additional |
| Indexed? | No — $250k unchanged since 2012 | No — $3M fixed, not CPI-indexed |
| Effective date | 2012-13 | 2025-26 (proposed, not yet law) |
| Can pay from super? | Yes — up to 100% via release authority | Yes — up to 85% via release authority |
Frequently asked questions
- When would Division 296 tax first apply?
- The Treasury Laws Amendment (Better Targeted Superannuation) Bill 2024 has not received Royal Assent as at April 2026. If enacted as proposed, the first assessments would be issued after the 2025-26 tax returns are lodged. Until the bill passes, Division 296 has no legal effect.
- Does it apply to my entire super balance or just the part above $3M?
- Only the part above $3M is affected. Specifically, the proportion of your earnings attributable to the balance above $3M is taxed. Earnings on the portion below $3M remain taxed at the existing fund tax rate (15% for accumulation, 0% for pension phase up to the Transfer Balance Cap).
- Does Division 296 apply to pension-phase assets?
- Yes, if the total across all your super interests (accumulation plus pension) exceeds $3M. The Transfer Balance Cap controls how much you can have in the pension phase tax-free environment, but Division 296 operates on a different measure — total balances across all super interests including accumulation accounts.
- What if my SMSF has a property that went up in value but I have no cash to pay the tax?
- This is the central cash-flow problem with Division 296 for SMSF trustees holding illiquid assets. You can release up to 85% of the tax from the fund (assuming the fund has liquid assets to cover it), but if the fund holds only illiquid assets, the fund may need to use existing cash reserves, borrow (subject to SMSF rules), or sell an asset. Advance planning is essential for illiquid SMSFs above $3M.
- Can I reduce my Division 296 liability by splitting with my spouse?
- Yes. Spouse contribution splitting can reduce one member's TSB below the $3M threshold while increasing the other's. If both spouses remain below $3M, neither pays Division 296 tax. This is one of the most commonly discussed planning strategies and requires careful modelling of both partners' balances over time.
- Does Division 296 apply to defined benefit funds?
- Yes, but the calculation for defined benefit interests is different. The ATO uses a notional earnings calculation based on the annual increase in the defined benefit interest rather than the change in TSB. This applies to Commonwealth and some state government defined benefit schemes.
- Is this financial advice?
- No. This calculator is for education and planning estimation only. SuperCalc Pro does not hold an AFSL and does not provide personal financial advice. Individual circumstances vary significantly — speak to a licensed tax adviser or financial planner.