Division 296 Tax Calculator - Australia | Free Super Tax Estimator

How to Use This Calculator

Our Division 296 Tax Calculator helps you estimate your tax liability under Australia's new superannuation earnings tax that begins 1 July 2026.

Step 1: Select Financial Year

Choose the year you want to calculate. Note that 2026-27 is the transition year with special rules (uses end-of-year TSB only).

Step 2: Enter Your Total Super Balance (TSB)

• 2026-27: Enter your TSB at 30 June 2027
• 2027-28 onwards: Enter both start and end of year TSB (calculator uses the higher value)

Your TSB includes balances across ALL super funds (SMSF, industry funds, retail funds, etc.).

Step 3: Enter Realised Earnings

Input your total realised superannuation earnings for the year:

• Interest income
• Dividends
• Rental income
• Realised capital gains (gains from actual sale of assets)

Important: Unrealised gains (paper profits on assets you still hold) are NOT included under the revised Division 296 rules.

Step 4: Use Advanced Options (Optional)

For 5-year projections:

• Set expected annual return rate
• Set expected CPI inflation rate (for threshold indexation)

Step 5: Calculate

Click "Calculate Division 296 Tax" to see your results.

What is Division 296 Tax?

Division 296 is an additional tax on superannuation earnings for individuals with Total Super Balances (TSB) above certain thresholds.

Key Features

Two-Tier Threshold System:

• Tier 1: $3 million to $10 million
• Tier 2: Above $10 million

Tax Rates:

• Tier 1: Additional 15% tax (30% total with base fund tax)
• Tier 2: Additional 25% tax (40% total with base fund tax)

Indexed Thresholds:

• $3M threshold: Indexed in $150,000 increments
• $10M threshold: Indexed in $500,000 increments

Start Date:

• Effective 1 July 2026
• First assessments for 2026-27 financial year

Understanding Your Results

Division 296 Tax Amount

The additional tax you'll pay on top of normal superannuation fund tax (15%).

Effective Tax Rate

Your total tax (base fund tax + Division 296) as a percentage of your superannuation earnings.

Examples:

• Below $3M: 15% effective rate
• $5M balance: ~18-20% effective rate
• $15M balance: ~25-28% effective rate

5-Year Projection

Shows how your tax liability will change over time with:

• Growing super balance
• Indexed thresholds
• Compound growth effects

How Division 296 is Calculated

Step 1: Determine Your TSB

• 2026-27 (transition): Uses TSB at 30 June 2027
• 2027-28 onwards: Uses higher of TSB at start or end of year

Step 2: Calculate Proportions

Your TSB is divided into segments:

• Below $3M (no Division 296 tax)
• $3M to $10M (15% additional tax)
• Above $10M (25% additional tax)

Example: $12M TSB

• Below $3M: $3M (25%)
• $3M-$10M: $7M (58.33%)
• Above $10M: $2M (16.67%)

Step 3: Allocate Earnings

Earnings are proportionally allocated to each tier.

Example: $600,000 earnings on $12M TSB

• Tier 1 earnings: $600,000 × 58.33% = $350,000
• Tier 2 earnings: $600,000 × 16.67% = $100,000

Step 4: Calculate Tax

• Base fund tax: 15% on all earnings = $90,000
• Tier 1 additional tax: 15% × $350,000 = $52,500
• Tier 2 additional tax: 25% × $100,000 = $25,000
• Total tax: $90,000 + $52,500 + $25,000 = $167,500

Step 5: Determine Effective Rate

$167,500 ÷ $600,000 = 27.9% effective tax rate

Who Does Division 296 Affect?

Affected Individuals

• Super balance above $3 million at 30 June
• Applies to total balance across all funds
• Both accumulation and pension phase

Not Affected

• Balances below $3 million
• Certain defined benefit interests (special rules)
• Some personal injury compensation contributions

Common Scenarios

Scenario 1: Single SMSF

• Member with $5M in one SMSF
• ✅ Division 296 applies

Scenario 2: Multiple Funds

• $2M in industry fund + $1.5M in SMSF = $3.5M total
• ✅ Division 296 applies (TSB combines all funds)

Scenario 3: Couples

• Partner A: $4M, Partner B: $2M
• ✅ Only Partner A affected (assessed individually)

Scenario 4: Pension Phase

• $6M in pension account
• ✅ Division 296 still applies (phase doesn't matter)

Important Considerations

Realised vs Unrealised Earnings

Realised earnings (TAXED):

• Interest and dividends
• Rent from property
• Capital gains from sold assets
• Distributed trust income

Unrealised gains (NOT TAXED):

• Increase in property value (not sold)
• Increase in share value (not sold)
• Paper profits on any asset still held

This is a major change from the original proposal which included unrealised gains.

CGT Cost Base Election (SMSFs)

SMSFs can elect to reset the CGT cost base to market value at 30 June 2026. This is:

• Irrevocable once made
• Fund-level (applies to all CGT assets)
• For Division 296 only (doesn't affect normal fund tax)

Benefit: Reduces Division 296 tax on gains that occurred before 1 July 2026.

Should you elect?

• ✅ Yes if: Significant unrealised gains pre-July 2026
• ❌ No if: Recently acquired assets or significant losses

Consult a qualified SMSF specialist before making this election.

Payment Options

You can pay Division 296 tax from:

1. Super fund assets (releases from super)
2. Personal assets (pay from outside super)

Strategic consideration: Paying from personal assets preserves more in super for compound growth.

SMSF-Specific Requirements

• May require actuarial certification for earnings attribution
• More complex if multiple members
• Different rules may apply for defined benefit pensions
• Cost base election requires careful record-keeping

Tax Minimization Strategies

1. Rebalance Before 30 June

Since TSB at 30 June determines liability, consider:

• Withdrawing lump sums before year-end
• Making pension payments before 30 June
• Recontributing to spouse's account

Example: Reduce $3.2M to $2.9M before 30 June 2027 to avoid Division 296 entirely.

2. Spouse Contribution Splitting

If one spouse is above threshold and other is below:

• Split contributions to lower-balance spouse
• Rebalance over multiple years
• Can save significant Division 296 tax

Example: Couple with $7M total

• Before: Partner A $5M (taxed), Partner B $2M (not taxed)
• After rebalance: Both $3.5M (both pay less than if concentrated)

3. Manage Realisation of Gains

Since only realised gains are taxed:

• Time asset sales strategically
• Consider holding appreciated assets longer
• Offset gains with realised losses
• Defer sales to years with lower TSB

4. Asset Allocation Review

Consider:

• Income-producing vs growth assets
• Tax-effective investments
• Assets held inside vs outside super
• Franked dividends vs unfranked income

5. Defined Benefit Strategies

Special rules apply for defined benefit interests:

• Defined benefit income may have different treatment
• Seek specialist advice if you have DB interests

Frequently Asked Questions

When does Division 296 start?

Division 296 takes effect 1 July 2026. The first assessments will be based on TSB at 30 June 2027, with tax notices issued in the 2027-28 financial year.

What if I'm just over $3M?

Even $1 over triggers Division 296 tax, but you only pay extra tax on the proportion above $3M. For example, $3.1M balance means only 3.2% of earnings are subject to the additional 15% tax.

Do the thresholds increase over time?

Yes, both thresholds are indexed to CPI:

• $3M increases in $150,000 increments
• $10M increases in $500,000 increments

With 2.5% inflation, $3M could become $3.15M-$3.3M within a few years.

Can I avoid Division 296 by switching to pension phase?

No. Division 296 applies to total super balance regardless of whether it's in accumulation or pension phase.

What about death benefits?

Under the revised Bill, if you die during the year and your TSB at start of year was above $3M, Division 296 tax still applies for the period to your date of death (except in 2026-27 transition year).

How is TSB calculated for multiple funds?

TSB is the total across ALL your super interests:

• Industry funds
• Retail funds
• SMSFs
• Public sector funds
• Defined benefit interests (special valuation)

The ATO tracks TSB automatically through member reporting.

What if I have a defined benefit pension?

Special rules apply. Defined benefit interests may:

• Be valued differently for TSB purposes
• Have different earnings attribution methods
• Require specialist actuarial advice

Can I pay the tax from outside super?

Yes. You can choose to pay Division 296 tax from:

• Personal bank account
• Investment portfolio
• Any non-super assets

This preserves more capital inside super for tax-advantaged growth.

What happens if regulations change?

The revised Bill (December 2025) is still subject to:

• Final passage through parliament
• Detailed regulations
• ATO administrative guidance

Some operational details may change before 1 July 2026. Monitor updates from your super fund and advisor.

Do I need to report anything?

If affected:

• Your super fund(s) will report earnings to ATO
• ATO will issue a Division 296 assessment
• You'll receive a notice with tax payable
• Payment due similar to income tax

SMSFs may need to engage actuaries for earnings attribution.

Professional Advice Recommended

Division 296 tax is complex, especially for:

• SMSF trustees
• Individuals near thresholds
• Those with multiple super interests
• Defined benefit pension holders
• Complex investment structures

This calculator provides estimates only. Consult a qualified financial advisor or tax professional for:

• Personalized tax planning
• CGT cost base election decisions
• Contribution strategies
• SMSF compliance requirements
• Estate planning considerations

Related Resources

• Division 296 Tax Calculator & Guide - Complete guide with examples
• Division 296 Tax: Complete Guide to Australia's $3M Super Tax - In-depth analysis

**Disclaimer:** This calculator is based on the revised Division 296 legislation (December 2025). Final regulations are still being developed. Calculations are for illustrative purposes only and should not be relied upon for tax planning without professional advice. Results may change as regulations are finalized. Consult a qualified financial advisor or tax professional for personalized guidance.

**Last Updated:** January 12, 2026
**Calculator Version:** 1.0 (Revised Bill - December 2025)