Division 296 Super Tax: Practical Things to Consider
Division 296 is a controversial Federal Government proposal to impose an extra 15% tax on super earnings if your total superannuation balance (TSB) exceeds $3 million at 30 June of the income year.
Is it law yet?
Not yet — it still needs to pass both Houses of Parliament. The earliest start date could be 1 July 2025, with the first tax bills issued after 30 June 2026.
How does it work?
If your TSB is above $3 million at 30 June, a portion of your annual super earnings above that threshold will be taxed at an extra 15%. This tax is assessed personally and can be paid from your super or your own funds. Your TSB includes all Australian super interests — APRA funds, SMSFs, and defined benefit schemes.
Example
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Sam: Balance $4m → $120k growth → 25% ($1m above threshold) → Taxable portion: $30k → Extra tax: $4,500
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Lisa: Balance jumps from $2m to $4.5m due to inheritance — new growth may still attract the tax.
What can you do?
✅ Review liquidity and cashflow planning for future tax payments
✅ Keep asset valuations up to date
✅ Estimate combined balances and plan for big transactions
✅ Seek tailored advice before changing anything
