How Division 296 tax works in Australia for 2026-27
Division 296 reduces the superannuation tax concession for individuals whose Total Superannuation Balance exceeds the large superannuation balance threshold. The first affected income year is 2026-27.
For 2026-27, the large balance threshold is $3 million and the very large balance threshold is $10 million. The tax is imposed on the individual and is calculated by applying balance-based proportions to Division 296 superannuation earnings. The thresholds are indexed for later years under the enacted legislation.
No Division 296 tax from the basic threshold test.
Applied to the attributable share of taxable superannuation earnings.
Added to the very large balance earnings component, taking that attributable slice to 25% Division 296 tax.
The 2026-27 calculation in five steps
Start with your 30 June 2027 TSB
For the transitional 2026-27 year, the legislation uses the end-of-year Total Superannuation Balance for these percentage calculations.
Calculate the share above $3 million
If your TSB is above $3 million: (TSB − $3,000,000) ÷ TSB. The statutory percentage is rounded to two decimal places.
Apply that share to Division 296 earnings
The resulting amount is the taxable superannuation earnings used for the 15% Division 296 component.
Check the $10 million threshold
If TSB is above $10 million, a second proportion — (TSB − $10,000,000) ÷ TSB — is applied to earnings to determine the very large balance earnings component.
Apply the tax rates
Estimated Division 296 tax = 15% of taxable superannuation earnings + 10% of the very large balance earnings component.
The final 2026 law moved away from simply taxing year-to-year balance growth. Division 296 earnings use statutory fund earnings concepts and are generally linked to realised taxable earnings. A fund's reported Division 296 earnings can differ from a simple percentage return, so use fund/accountant/ATO figures when available.
Division 296 calculator examples
These examples hold Division 296 earnings at $100,000 so you can see how the balance-based proportion changes the estimated additional tax.
| 30 June 2027 TSB | Share above $3m | Share above $10m | Estimated Division 296 tax on $100k earnings |
|---|---|---|---|
| $3,000,000 | 0% | 0% | $0 |
| $4,000,000 | 25% | 0% | $3,750 |
| $6,000,000 | 50% | 0% | $7,500 |
| $10,000,000 | 70% | 0% | $10,500 |
| $12,000,000 | 75% | 16.67% | about $12,917 |
Illustrative only. The actual earnings amount and any special rules or adjustments can change the final ATO assessment.