Division 296 Calculator

How is Division 296 tax calculated?

Division 296 tax for 2026-27 is 15% of the share of your total super earnings that matches the share of your balance above $3 million, plus 10% of the share that matches the balance above $10 million. The balance only sets the percentage. The tax is charged on earnings, never on the balance itself.

So a balance of $4,000,000 at 30 June 2027 sits 25% above the threshold, and 25% of that year's earnings is taxed at 15%. Six steps get you there.

1. Find your TSB reference amount. For 2026-27 it is your total super balance at 30 June 2027. From 2027-28 it is the higher of your balance just before the year starts and your balance at the end of it. In the ATO's example, Kelly has $12,000,000 at 30 June 2027.
2. Work out the share above $3 million. Subtract $3,000,000, divide by the reference amount, multiply by 100 and round to 2 decimal places. For Kelly that is 75%.
3. Work out the share above $10 million. Only if the reference amount is above $10,000,000. The same formula, still divided by the whole reference amount, gives Kelly 16.67%.
4. Add up the earnings your funds report. Your total super earnings are the relevant super earnings every fund reports for you. If the total is nil or less, there is no tax. Kelly's funds report $500,000.
5. Multiply the earnings by each rounded percentage. 75% of $500,000 gives taxable super earnings of $375,000, and 16.67% gives a very large balance earnings component of $83,350.
6. Apply 15% and 10%, then add. 15% of $375,000 is $56,250 and 10% of $83,350 is $8,335, so Kelly's Division 296 tax for 2026-27 is $64,585.

What do the ATO's worked examples come to?

The ATO publishes six worked examples with dollar figures. Every figure below is produced by the same engine as the calculator, and each matches the ATO to the cent.

• Leanne has three funds reporting $28,500 between them. Her balance is 14.29% over $3 million, so $4,072.65 is taxable and the tax is $610.90.
• Jordan is the plain case: a quarter of the balance over the threshold, a quarter of the earnings taxed, $3,750 to pay.
• Kelly crosses both thresholds. 15% of $375,000 is $56,250, and a further 10% of $83,350 is $8,335.
• George holds a $9,000,000 Judges' Pensions Act interest, which is excluded, and a $2,000,000 accumulation account. The excluded interest counts in his balance but its earnings are taken to be nil, so only the accumulation account's $130,000 is taxed, at percentages set by the full $11,000,000.
• Gina has two defined benefit interests, so most of her $3,960 is deferred. The split is worked through under defined benefit interests below.
• Andrew is a 2027-28 case, calculated as the ATO does, assuming the threshold is not indexed. His balance falls to $2,920,000 by 30 June 2028, but his $3,900,000 at the start of the year sets the reference amount, and he pays $7,858.74.

Two misprints on the ATO pages are worth knowing about if you check these figures against them. Leanne's tax line reads "× 5%" where the rate is 15%, and George's summing line shows $14,183.35 where the line above it has $14,182.35. The totals the ATO prints are right, and they are what the engine reproduces.

What counts as super earnings, and who calculates them?

Your funds calculate them and the ATO adds them up. Each APRA-regulated fund works out its Division 296 fund earnings for the year and attributes a share, on a fair and reasonable basis, to each member whose balance is above $3 million. SMSFs and small funds follow rules set in the regulations and report through the SMSF annual return. The ATO totals the relevant super earnings every fund reports for you, counting excluded interests and foreign funds as nil. That total is your total super earnings, and it is the figure the calculator asks for.

It is not your investment return and it is not your fund's crediting rate. Fund earnings start from the fund's taxable income or tax loss, take out assessable contributions, add back net exempt current pension income, and adjust for non-arm's length income and pooled superannuation trust amounts. You cannot rebuild that from a member statement, which is why the calculator takes the reported figure. If you are in an SMSF, the ATO asks you to let the fund know, or make sure the steps are taken to calculate your relevant earnings.

Under that general rule, capital growth reaches your earnings only through a net capital gain, which needs a CGT event such as a sale. That is our reading of how the Act builds fund earnings; the ATO's pages do not use the words realised or unrealised. It does not hold for defined benefit interests not in retirement phase or for some prescribed interests, whose earnings are measured from the change in the interest's value, growth included.

A fund's Division 296 fund earnings are nil if they would otherwise be negative, and you only have taxable super earnings when your total super earnings are greater than nil. We found no provision that carries a negative figure into a later year, and the ATO says it is still drafting a law companion ruling, so the calculator models none.

Which super balance does Division 296 test?

For 2026-27, only your total super balance at 30 June 2027. From 2027-28, the higher of your balance just before the year starts and your balance at the end of it. A balance that climbs above $3 million during the year and is back below it by 30 June does not count. The ATO's examples show each case.

Both tests are strictly "greater than". A reference amount of exactly $3,000,000 gives no tax, and exactly $10,000,000 gives no extra 10%.

The balance counts all your Australian super interests, any interest supporting an income stream you receive because of someone else's death, and interests you hold notionally under a family law split. Limited recourse borrowing arrangement amounts, which sometimes count in a total super balance, never count for Division 296. Excluded interests stay in the balance. If you die, your balance from that time is taken to be nil.

Are the $3 million and $10 million thresholds indexed?

Yes, to CPI, from 2027-28. The $3 million threshold moves in $150,000 increments and the $10 million threshold in $500,000 increments. The indexed amount is rounded down to the increment, measured against the December 2025 quarter. The ATO has not yet published a 2027-28 threshold.

On our arithmetic, because the result is rounded down, neither threshold can move until CPI is 5% above its December 2025 quarter level. That is the point at which $3,000,000 becomes $3,150,000 and $10,000,000 becomes $10,500,000.

The calculator's 2027-28 option follows the ATO's own 2027-28 example, which states: "Assuming the LSBT is not indexed, it will be $3 million for the 30 June 2028 income year." Treat a 2027-28 result as provisional until the ATO publishes the figure.

How does Division 296 treat defined benefit interests?

The tax is assessed and then deferred, not waived. For a defined benefit interest not in retirement phase, your fund works out relevant earnings from the change in the interest's value over the year, adjusted for contributions and withdrawals and multiplied by a prescribed factor of 0.825. The share of your Division 296 tax that relates to those earnings waits until an end benefit is paid from that interest, and falls due 21 days after it is paid.

The deferred share is your Division 296 tax multiplied by the interest's relevant earnings over your total super earnings. Deferred debts not paid by 30 June each year attract end of year interest at the long-term bond rate for that year. Gina, from the ATO's example, shows the split.

Enter the defined benefit figure in the calculator's optional field and it splits the tax the same way. It does not compute defined benefit earnings from balances, because the contributions and withdrawals rules sit with your fund. Use the figure your fund reports.

Who is exempt from Division 296?

Three groups are excepted outright:

• a child recipient of a super income stream at any time in the income year
• anyone who has received a structured settlement contribution for a personal injury, in that year or any earlier year
• anyone who dies during 2026-27.

The calculator's exception box covers the first two.

Some interests are excluded rather than exempt. Their earnings count as nil, but their value still counts in the balance that sets your percentages: constitutionally protected funds held by current or former state higher level office holders, Judges' Pensions Act 1968 interests of High Court and federal court judges, ACT and NT Supreme Court judges' schemes, pensions under s 123 of the Federal Circuit and Family Court of Australia Act 2021, non-complying funds, foreign super funds, and the reversionary recipients of each. George above shows the effect.

Former temporary residents who received a departing Australia superannuation payment can apply for a refund of Division 296 tax paid while a temporary resident. The ATO says the approved form is still under development.

When and how do you pay Division 296 tax?

You do not lodge anything. The ATO assesses you once your funds have reported, and the first assessments, for 2026-27, begin issuing in the later half of the 2027-28 income year. Defined benefit and prescribed-formula funds get their first information requests in November 2027, and other APRA-regulated funds from April 2028. If you lodge through myTax, the notice goes to your myGov Inbox.

• Due date. 84 days from the date of the notice of assessment. An amended assessment gives 84 days from its own date for any extra tax.
• Paying from super. Within 60 days of the notice you can elect, through ATO online services in myGov or through a tax agent, to release some or all of it from super. The ATO then sends a release authority to your fund. The election cannot be withdrawn or reversed, and the 60 days do not move the due date.
• If you do not pay. The ATO may issue your funds with a release authority itself, and the general interest charge applies until the debt is paid.
• Whose tax it is. Yours, not the fund's, even when it is paid from super. It is not deductible.

How is Division 296 different from Division 293?

Division 293 taxes contributions going into super. Division 296 taxes earnings on a balance already there. They have different triggers and are assessed separately, and you can owe both in the same year.

If your income plus concessional contributions passes $250,000, the Division 293 calculator works out that tax. What changed on 1 July 2026 is covered in Division 296 started on 1 July.

How much Division 296 tax at common balances?

Our calculation, using the engine above for 2026-27, with each balance taken as the balance at 30 June 2027. The earnings columns are illustrations: your own figure comes from your funds, and a larger balance does not by itself mean larger earnings.

Sources

• ATO: How Division 296 tax is calculated (QC107623, last updated 29 June 2026). The reference amount, both formulas, the 2 decimal place rounding, and the Leanne, Jordan, Kelly, Andrew, Mary, Eliza and Garrick examples.
• ATO: Division 296 tax on large super balances (QC107622, last updated 29 June 2026). The thresholds, CPI indexation increments, exceptions and assessment timing.
• ATO: Division 296 tax for defined benefit interests and other prescribed interests (QC107624, last updated 29 June 2026). Deferral, the deferred share formula and the Gina example.
• ATO: Paying Division 296 tax (QC107625, last updated 29 June 2026). The 84-day due date, the 60-day release election and the general interest charge.
• ATO: Division 296 tax excluded interests (QC107626, last updated 29 June 2026). The excluded interests and the George example.
• ATO: Division 296 tax refund for former temporary residents (QC107627, last updated 29 June 2026).
• ATO: About Division 296 tax for APRA funds (QC107629, last updated 29 June 2026). How funds attribute earnings, and the fund reporting timetable.
• Federal Register of Legislation: Treasury Laws Amendment (Building a Stronger and Fairer Super System) Act 2026 (No. 8, 2026, C2026A00008, assent 13 March 2026). ITAA 1997 ss 296-15 to 296-70 and the 2026-27 transitional rule.
• Federal Register of Legislation: Superannuation (Building a Stronger and Fairer Super System) Imposition Act 2026 (No. 9, 2026, C2026A00009). Section 5 sets the 15% and 10% rates.
• Federal Register of Legislation: Income Tax Assessment (1997 Act) Amendment (Building a Stronger and Fairer Super System and Other Measures) Regulations 2026 (F2026L00726, dated 11 June 2026). The 0.825 prescribed factor for defined benefit interests.
• ATO legal database: ITAA 1997 s 960-285. CPI indexation, the $150,000 and $500,000 rounding amounts, and the December 2025 base quarter.