Division 296 Tax Calculator

Division 296 is a new tax on superannuation earnings for people with very large balances. From 1 July 2026, an extra 15% applies to the proportion of your super earnings attributable to the part of your Total Super Balance (TSB) above $3 million, with a further 10% (25% total) on the proportion above $10 million. It sits on top of the standard 15% tax already paid inside super, so the effective rate on earnings in the affected portion is up to 30% (for balances between $3m and $10m) and up to 40% (for the portion above $10m). It became law on 13 March 2026 under the Treasury Laws Amendment (Building a Stronger and Fairer Super System) Act 2026.

How does the $3 million super tax work?

Division 296 does not tax your whole balance, and it does not tax all of your earnings. It taxes only the proportion of your earnings that relates to the part of your balance above $3 million. So even if your balance is above the threshold, the effective rate stays modest unless a large share of your balance sits above $3 million. The $3 million figure is the “large super balance threshold” for 2026-27; a second “very large super balance threshold” of $10 million triggers the additional 10%.

How is Division 296 calculated?

The calculation has two steps:

• Step 1 — work out the proportion above $3m: (TSB − $3,000,000) ÷ TSB. For a $5 million balance, that is ($5m − $3m) ÷ $5m = 40%.
• Step 2 — apply the rate to your earnings: multiply your realised super earnings for the year by that proportion, then by 15%. On $500,000 of earnings: 15% × $500,000 × 40% = $30,000.
• Above $10m: a further 10% applies to the proportion of earnings attributable to the balance above $10 million, calculated the same way.

Does it tax unrealised gains?

No. The original 2023 design taxed total earnings including unrealised (paper) gains, which was the most controversial part of the measure. That was removed in the redesign. The final law taxes realised earnings only — dividends, interest, rent, and realised capital gains net of realised losses. A negative-earnings (loss) year attracts no Division 296 tax, and the loss can be carried forward to offset future earnings.

Who is affected?

Only individuals whose Total Super Balance exceeds $3 million at 30 June of the financial year. Treasury estimates around 80,000 people — roughly 0.5% of super members — will be affected in the first year. Both thresholds are indexed to CPI ($150,000 increments for the $3m threshold, $500,000 for the $10m threshold), so the figures can rise over time.

When does it start and when is it assessed?

Division 296 applies from 1 July 2026, covering earnings in the 2026-27 financial year and beyond. It is a personal tax, separate from your fund’s tax. The ATO works out your liability from data reported by your super funds and issues a separate assessment — the first assessments are expected in 2027-28. You can choose to pay it from your own money or release the amount from your super fund.

Key figures at a glance (2026-27)

• Threshold 1: $3,000,000 (indexed in $150,000 steps)
• Extra tax above $3m: 15% on the attributable proportion of earnings
• Threshold 2: $10,000,000 (indexed in $500,000 steps)
• Extra tax above $10m: a further 10% (25% Division 296 in total)
• Earnings base: realised earnings only — unrealised gains excluded
• Start date: 1 July 2026; first ATO assessments expected 2027-28

Sources: ATO — Better Targeted Super Concessions (Division 296); Treasury Laws Amendment (Building a Stronger and Fairer Super System) Act 2026 (Royal Assent 13 March 2026). This is general information and an estimate only, not financial or tax advice — your actual liability is determined by the ATO.