Tax
Division 296 measures your super on 30 June 2027. See what it costs you first.
Division 296 is law, the first measurement date is 30 June 2027, and almost everything said about it in public is about a version that never passed. This projects the one that did, on your own figures, and prices every lawful way to respond.
The $3m super tax that passed is not the one people argue about. Mixing them up costs money.
On the ATO's published figures, about 4.7% of self managed fund members (roughly 56,547 people) are above the threshold. Yet the public conversation is still largely about the 2023 exposure draft. Unrealised gains were in that draft. They are not in the Act. The thresholds were not indexed in that draft. In the Act, both index to CPI: $3,000,000 in $150,000 increments and $10,000,000 in $500,000 increments.
What is in the Act is arithmetic almost nobody has run on their own numbers. Your total super balance reference amount, minus $3,000,000, divided by that reference amount, gives a percentage. That percentage of your realised superannuation earnings for the year is taxed at 15%, with a further 10% above $10,000,000. On the sample report's $4,000,000 balance, projected to the first measurement date, the taxable proportion is 27.72% and the first year's liability is $6,357. That is a long way from what most people picture when they hear "a tax on balances over three million".
The single most expensive misunderstanding: the retirement phase is not a shelter. Net exempt current pension income is added back in working out Division 296 earnings, so a fund paying no income tax at all has exactly the same Division 296 earnings as an identical fund that is not in pension phase.
What the Division 296 calculator works out for you
- Year by year, not one year. Division 296 compounds through a balance, and the first year is almost never the expensive one. The projection runs forward through the thresholds as they index.
- The 30 June 2027 transitional rule, correctly. For the 2026-27 income year and no other, both whether it applies and what proportion is taxable are decided by your balance at the end of the year. From 2027-28 the reference is the greater of the opening and closing balance.
- The SMSF cost base reset election, called either way, where your fund can make it. All assets or none, once, by 15 May 2028. It is worth a great deal to some funds and nothing at all to others, and the difference is not obvious by inspection.
- Whether to withdraw before 30 June 2027, if you can. Often the answer is no. At its very worst, Division 296 takes a member entirely in accumulation to 40% on earnings, against a top personal rate of 47%, and the report says so where that is the answer.
- Every lawful response, ranked. Withdraw, restructure, equalise between spouses, change turnover, stop contributing, or do nothing, each priced on one measure.
What the full report adds on top
- Every lawful response open to you, priced against the others (10 on the sample report), over the whole projection rather than a single year, with the gap between the best and the worst stated in dollars.
- If others share your fund, how it splits earnings between members. This is where an SMSF with two members and one large balance produces answers nobody expects.
- Turnover, the lever nobody mentions. Division 296 taxes realised earnings, so how often the portfolio turns over changes the liability without changing the return.
- The paying decision. Your own money or a release authority from the fund, within 60 days, priced both ways.
What this calculator will not do
It is not financial product advice or tax advice, and it does not recommend a response. What your funds actually realise in a given year is not knowable in advance, so a projection is a projection: the report shows the working and the assumptions rather than a single confident number. The Australian Taxation Office assesses Division 296 from what your funds report, and it is the only body that can tell you what you actually owe. Everything here runs on the Act as it commenced on 1 July 2026, when Division 296 commenced.
What people ask before they run it
How is the Division 296 tax calculated?
Division 296 taxes a share of your realised super earnings, not your balance. Take your total super balance, subtract $3,000,000, and divide the result by your balance. That gives a percentage, to two decimal places. That percentage of the year's realised earnings is taxed at 15%. Above $10,000,000, a second share is worked out the same way and taxed a further 10%, so 25% in total on that slice.
When is the first Division 296 measurement date?
The first measurement date is 30 June 2027. For the 2026-27 income year only, both whether Division 296 applies and what share of your earnings is taxed depend on your total super balance at the END of the year. From 2027-28 onwards, the ATO uses the higher of your balance just before the start of the year and your balance at the end of it.
Does the $3m super tax apply to unrealised gains?
No. Unrealised gains were in the 2023 draft law but are not in the Act that passed. Division 296 fund earnings are the fund's taxable income, less assessable contributions, plus net exempt current pension income. In plain terms, that means investment income the fund actually received and capital gains on assets it actually sold, after the fund's one third CGT discount.
Is my pension account exempt from Division 296?
No, and this is the most common mix-up of all. When a fund works out its Division 296 earnings, its tax-free pension income (net exempt current pension income) is added straight back in. So a fund paying no income tax because every member is in the retirement phase has exactly the same Division 296 earnings as an identical fund in accumulation. The retirement phase only changes the fund's own 15% tax.
What is the SMSF cost base reset election for Division 296?
It is a one-off choice that lets a self managed fund or small APRA fund treat each asset's cost base as its market value at the end of 30 June 2026, for Division 296 purposes only. It covers every asset the fund held on that date or none of them, and it cannot be undone. It is due by the fund's 2026-27 annual return date: 15 May 2028 for a fund lodging through a tax agent.
Will the $3 million threshold go up with inflation?
Yes. Both thresholds are indexed to the Consumer Price Index from a December 2025 base quarter. The $3,000,000 threshold rises in $150,000 steps and the $10,000,000 threshold in $500,000 steps, each rounded down to a whole step. Each step is exactly 5% of its own threshold, so the two always move together and one can never rise without the other.
When will I get my first Division 296 tax bill, and how do I pay it?
The ATO expects to start issuing 2026-27 assessments in the second half of the 2027-28 income year. You have 84 days from the date of the notice to pay. You can pay it with your own money, or elect within 60 days of the same notice to have it released from one or more of your super funds. That election does not give you extra time to pay.
Should I take money out of super before 30 June 2027?
Often not, and the calculator says so when that is the answer. At its very worst, Division 296 takes a member fully in accumulation to 40% on earnings, and one fully in the retirement phase to 25%. The top personal tax rate is 47%. Whether a withdrawal comes out ahead depends on your balance, how much of it is in the retirement phase, and the tax rate the money would face outside super.
How many people does Division 296 affect?
About 4.7% of self managed fund members have a balance above $3,000,000 on the ATO's published figures, which is roughly 56,547 people. When the measure was announced, Treasury estimated it would reach around 0.5% of all Australians with a super account. Being over the line does not create a bill by itself: a fund that realises nothing in a year has no Division 296 earnings to tax.
Who has to pay the Division 296 tax?
Anyone whose total super balance is above $3,000,000 at a measurement date can be caught, and the tax is assessed on you personally, not on your fund. Your total super balance adds together every super interest you hold, in every fund. Being over the line does not create a bill on its own, because only realised earnings are taxed. A fund that realises nothing in a year produces nothing to tax.
When did the Division 296 tax start?
Division 296 started on 1 July 2026, after it became law in March 2026. It was first announced in February 2023, but the version that passed is quite different from the 2023 draft that most articles describe. The first measurement date is 30 June 2027, and the ATO expects to issue the first assessments in the second half of the 2027-28 income year.
Is Division 296 tax deductible?
No. Division 296 tax is not deductible. It is assessed on you personally rather than on your fund, and you can pay it with your own money or elect to have it released from one or more of your super funds. It is charged on top of the tax your fund already pays on its own taxable income, not instead of it.
What happens to Division 296 if my super fund makes a loss?
A year with negative Division 296 fund earnings is treated as nil, so there is no Division 296 that year. But the loss does not carry forward to reduce later years, and a loss in one fund cannot offset a gain in another. A fund that loses $400,000 one year and earns $450,000 the next is taxed on the full $450,000, not the $50,000 it made overall.
Does Division 296 still apply after someone dies?
If you die during 2026-27, Division 296 does not apply to you for that year. That is a one-year transitional rule, not a permanent exemption. From 2027-28, if your balance just before the start of the year you die was over the threshold, you can be assessed for that year. Earnings until the death benefit is paid are added to that same year's assessment.
What is the $10 million Division 296 threshold?
It is a second, higher threshold. On the share of earnings linked to the part of your balance above $10,000,000, a further 10% is charged on top of the first 15%, which makes 25% in total on that slice. The second tier is charged on the same earnings as the first, not on a separate pot. The $10,000,000 line also rises with inflation, in $500,000 steps.
Everything on Division 296 Projector
Your estimate is free, and it is a real answer.
Projects Division 296 tax year by year on a member's own total super balance, prices every lawful response on one measure, and, where they apply, calls the SMSF cost base reset election and works out the withdrawal decision before the first measurement date on 30 June 2027.
Start the Division 296 calculator
