Division 296 calculator
The extra 15% on super earnings attributable to a balance above $3 million, including the unrealised gains most people do not expect to be taxed.
Covers 2026-27 · rates as at 2026-07-01
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 $3m is taxed. At a $3.7m closing balance that is 18.9%, not the whole amount.
How this is calculated
How this is calculated
Earnings are balance movement, not realised income
Closing balance less opening balance, less contributions, plus withdrawals. That definition includes unrealised gains, so a fund holding an asset that rose in value owes cash tax without having sold anything.
earnings = closing − opening − contributions + withdrawalsOnly the share above $3m is taxed
At a $3.7m closing balance, $700,000 of $3.7m is above the threshold — 18.9%. That proportion of earnings is taxed at 15%, not the whole amount. Taxing all earnings once the threshold is crossed is the common error.
proportion = (closing − $3m) ÷ closingThe threshold is not indexed
It is a fixed $3 million in nominal terms. At 2.5% inflation a balance that is $3m today is caught at about $2.34m of today’s purchasing power in ten years, so the reach broadens automatically.
Worked example: Balance from $3.4m to $3.7m with $30,000 contributed
| Opening | $3,400,000 |
|---|---|
| Closing | $3,700,000 |
| Contributions | $30,000 |
| Earnings | $270,000 |
|---|---|
| Attributable share | 18.9% |
| Rate | 15% on that share |
If that $270,000 was entirely unrealised — a valuation increase on a property held in the fund — the tax is still payable in cash, which is the liquidity problem the measure is criticised for.
What this assumes
- A single fund and a single member.
- Total super balance measured at 30 June.
- No structured settlement or death benefit adjustments.
- Existing 15% fund earnings tax applies separately.
Where this commonly goes wrong
- A negative earnings year can be carried forward against future Division 296 earnings, so a loss is not simply wasted — but it does not generate a refund.
- The tax is assessed personally rather than to the fund, so it can be paid from outside super or released from the fund, and the choice has its own consequences.
- An illiquid fund holding property or unlisted assets can owe tax on a valuation increase with no cash to pay it, which is the central practical objection to the measure.
Questions
How is Division 296 tax calculated?
Earnings are the movement in your total super balance adjusted for contributions and withdrawals. The share attributable to the balance above $3 million is taxed at an extra 15% — 18.9% of earnings at a $3.7m closing balance.
Does it tax unrealised gains?
Yes. Earnings are measured as balance movement, so a valuation increase on an asset the fund still holds is taxed. That is the central practical criticism, particularly for funds holding property.
Is the whole balance taxed once I pass $3 million?
No. Only the proportion of earnings attributable to the excess. At $3.7m that is $700,000 of $3.7m — 18.9% — so the extra tax applies to 18.9% of the year’s earnings, not all of it.
Is the $3 million threshold indexed?
No, and that is deliberate. It is fixed in nominal terms, so at 2.5% inflation it is worth about $2.34 million of today’s purchasing power in ten years and catches progressively more members.
What happens in a year my balance falls?
Negative earnings are carried forward and offset against Division 296 earnings in future years. They do not produce a refund, so a bad year only reduces later liability.
Who pays the tax, me or my fund?
You are assessed personally. You can pay it from your own money or elect to have it released from super — paying from outside preserves the balance, while releasing it reduces the amount compounding inside.
Related tools
Sources
General estimate based on published ATO rates for the 2026-27. 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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