Division 296 calculator
Additional tax on retirement balance growth above a threshold, including unrealised gains.
Division 296 tax
Estimate$7,662.00
18.9% of earnings are attributable to the balance above $3m
- Earnings for the year
- $270,000
- Attributable share
- $51,081
- Extra rate on all earnings
- 2.84%
| Closing balance | $3,700,000 |
|---|---|
| Opening balance | -$3,400,000 |
| Contributions, excluded from earnings | -$30,000 |
| Earnings | $270,000 |
| Attributable share at 18.9% | $51,081 |
| Taxed at 15% | -$7,662.00 |
- Earnings here are the movement in your total super balance, so unrealised gains are included — a fund that sold nothing can still generate a cash tax bill.
- The $3m threshold is not indexed, so the same real balance is caught more heavily every year through inflation alone.
Only the share of earnings attributable to the balance above the $3m threshold is taxed — at a $3.7m closing balance that is 18.9%, not all of it.
How this is calculated
How this is calculated
Balance movement can be the tax base
Australia defines earnings as closing balance less opening balance, adjusted for contributions and withdrawals. That includes unrealised gains, so tax can fall due without any asset being sold.
earnings = closing − opening − contributions + withdrawalsOnly the share above the threshold is taxed
At a $3.7m closing balance against a $3m threshold, 18.9% of earnings are attributable and taxed. Applying the rate to all earnings once the threshold is crossed overstates the bill fivefold.
proportion = (closing − threshold) ÷ closingUnindexed thresholds broaden over time
A fixed nominal threshold catches more people every year through inflation alone. At 2.5% a year, $3 million today is about $2.34 million of purchasing power in a decade.
Worked example: Balance from $3.4m to $3.7m with $30,000 contributed
| Opening | $3,400,000 |
|---|---|
| Closing | $3,700,000 |
| Earnings | $270,000 |
|---|---|
| Attributable share | 18.9% |
Retirement balance taxes differ by country. Pick a country above for the rules that apply to your fund.
What this assumes
- A single fund and member.
- Balance measured at the year end.
- No special adjustments applied.
- Ordinary fund earnings tax applies separately.
Where this commonly goes wrong
- Negative years are commonly carried forward rather than refunded, so a loss reduces future liability only.
- Where the tax is assessed personally rather than to the fund, you may choose whether to pay from inside or outside it.
- Taxing unrealised movement can create a cash liability for a fund holding illiquid assets.
Questions
How is a balance-based super tax calculated?
Australia measures earnings as the movement in total balance adjusted for contributions and withdrawals, then taxes the share attributable to the excess above $3 million at an extra 15%.
Why does taxing unrealised gains matter?
Because the liability is payable in cash while the gain is only on paper. A fund holding property can owe tax on a valuation increase with nothing sold and no cash available.
What does an unindexed threshold mean over time?
That it catches more people each year without any legislative change. At 2.5% inflation, a fixed $3 million threshold is worth about $2.34 million of today’s money within a decade.
Related tools
Sources
General estimate based on published ATO rates for the the current period. Not tax advice, and it does not consider your objectives, financial situation or needs. Confirm your position with the ATO or a registered tax agent.
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