Are you Paying Extra Super Tax?

Division 293 tax can be confusing, but the way it's calculated is simpler when you break it down step by step. For Division 293 purposes, the ATO looks at your income and adds certain superannuation contributions to determine whether you exceed the relevant income threshold. As an example, if you earn $240,000 and make an additional $15,000 voluntary contribution to super, your Division 293 income becomes $255,000. Because this exceeds the $250,000 threshold, an additional tax may apply. However, the tax isn't automatically applied to the full super contribution. Instead, the ATO calculates the tax using the lesser of two amounts: the amount of your super contributions, or the amount your Division 293 income exceeds $250,000 by. In this example, the contribution is $15,000, while the amount over the threshold is $5,000. The lesser amount is therefore $5,000. The additional Division 293 tax is 15% of that $5,000, resulting in a tax payable of $750. Understanding how Division 293 works can help you better plan your superannuation contributions and avoid unexpected tax outcomes. General advice only. Amy Lehmann is an Authorised Representative (No. 1292710) of Consortium Private Wealth Pty Ltd (AFS Licence 495401).

Disclaimer || The information provided in this post is general in nature only and does not constitute personal financial advice. Amy Lehmann is an Authorised Representative(No. 1292710) of AFSL 495401.