Division 296 Tax Calculator
Estimate the additional 15% tax on super earnings for balances above $3 million.
Division 296 applies from 1 July 2026. This calculator provides an estimate based on proposed legislation. The $3 million threshold is not indexed to inflation.
Division 296 Formula
Extra Tax = Earnings × (Balance - $3M) / Balance × 15%
Threshold: $3,000,000 | Additional rate: 15%
Division 296 Tax Owed
$0
Effective Additional Rate
0%
Combined Super Tax Rate
15%
Balance Above Threshold
$0
Understanding Division 296 Tax
Division 296 is a proposed addition to Australian tax law that introduces an extra 15% tax on superannuation earnings for members whose total super balance exceeds $3 million. Currently, super fund earnings are taxed at a flat 15%. Under Division 296, the portion of earnings attributable to the balance above $3 million would face an additional 15%, bringing the effective tax rate on those earnings to 30%.
How the Tax Is Calculated
The formula apportions your total super earnings based on how much of your balance exceeds the $3 million threshold. The calculation is: Extra Tax = Earnings × (Balance - $3,000,000) / Balance × 15%. For instance, with a $5 million balance and $400,000 in earnings, 40% of the balance is above the threshold, so the tax is $400,000 × 0.40 × 0.15 = $24,000.
Key Considerations
One significant feature of Division 296 is that earnings include unrealised capital gains, meaning the value increase of assets you have not yet sold. This could result in a tax liability even without cash being received. If your balance decreases and you have negative earnings, these can be carried forward to reduce future Division 296 tax. Importantly, the $3 million threshold is not indexed to inflation, so more members may be affected over time.
This calculator provides a simplified estimate. The actual tax will depend on the final legislation as passed by Parliament. Consider consulting a financial adviser or tax professional to understand your specific exposure.
This calculator is for informational purposes only and does not constitute financial, tax, or legal advice. Always consult a qualified professional for decisions specific to your situation.