Division 296 Tax Estimator 2026-27
Division 296 Tax Estimator 2026-27
From 1 July 2026, Division 296 adds an extra layer of tax on the earnings of superannuation balances above $3 million. This Division 296 estimator gives business owners and SMSF trustees a quick, general estimate of the additional tax on their fund earnings, applying the additional 15% on the portion of a balance between $3 million and $10 million and a further 10% on top of that, a total of 25%, on any portion above $10 million.
Enter your total super balance and estimated earnings below to see an indicative figure. For the full detail read our guides on Division 296 for business owners and SMSF trustees and Division 296 explained for large super balances. If Division 296 could affect you, book a tax planning review or speak with our team.
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Is Division 296 Actually Law?
Yes. After the redesign announced on 13 October 2025, the measure was enacted by the Treasury Laws Amendment (Building a Stronger and Fairer Super System) Act 2026 and the Superannuation (Building a Stronger and Fairer Super System) Imposition Act 2026, which received royal assent on 13 March 2026. The ATO confirms the measure is now law and applies from 1 July 2026. This matters, because a great deal of commentary still describes the original February 2023 proposal, which was materially different.
The ATO now uses two defined thresholds: the large super balance threshold (LSBT), set at $3 million for 2026-27, and the very large super balance threshold (VLSBT), set at $10 million for 2026-27. Both are indexed in line with CPI. Source: ATO, Better targeted superannuation concessions, last updated 7 July 2026.
How This Division 296 Estimator Works
From 1 July 2026, Division 296 imposes an additional tax on the earnings attributable to the part of an individual’s total super balance that exceeds the LSBT. Earnings on the portion between $3 million and $10 million carry an extra 15%, taking the effective rate on that slice to around 30%. Where a balance also exceeds the VLSBT, a further 10% applies to the portion above $10 million, so that slice carries 25% in total on top of the fund rate, an effective rate of around 40%. Only the earnings on the excess are affected, not the whole balance, and under the revised law it is the fund’s relevant super earnings, reported to the ATO, that are taxed rather than unrealised movements in asset values.
This estimator works out the proportion of your balance that sits above each threshold, applies that proportion to your earnings, and taxes the result at the additional 15% and 25% rates. It is a simplified guide. The actual assessment adjusts your total super balance for contributions and withdrawals, indexes the thresholds over time, and allows negative earnings to be carried forward. The law also changes the definition of total super balance and introduces a new concept of total super balance value, which can shift the result for some members.
Worked Example
Take an SMSF member with a total super balance of $4 million and earnings of $200,000 for the year. The portion of the balance above $3 million is $1 million, which is 25% of the $4 million balance. Applying that 25% to the $200,000 of earnings means $50,000 of earnings is caught by Division 296. The additional 15% tax on that $50,000 is $7,500. This sits on top of the 15% tax the fund already pays on its earnings, so the effective rate on that slice of earnings is around 30%.
What to Do With Your Results
Division 296 changes the maths on holding very large balances inside super. It does not automatically mean super is the wrong place for your wealth, but it does mean the decision now needs to be modelled rather than assumed. Options that are worth reviewing include how future contributions are directed, whether some assets are better held in a different structure such as a company or family trust, the timing of realising gains inside the fund, and how balances are split between spouses. Every one of these has trade-offs and needs to be weighed against your wider position.
Because the thresholds are indexed and the tax follows the fund’s reported earnings, the right response depends heavily on your specific fund, your assets and your timeframe. This is exactly the kind of decision that should be planned in advance with a registered tax agent who understands both the super rules and your broader structure. Read our detailed guides on Division 296 for business owners and SMSF trustees and what large super balance holders need to know, then book a review.
For most business owners the Division 296 question cannot be answered inside the fund alone. It turns on where the next dollar of profit should go, which is a group decision across the trading company, the trust and super rather than a super decision, and that is the work we do in business advisory in Melbourne. A tax planning review is where the contribution strategy, the asset location and the exit timing get modelled side by side, and a proactive business accountant in Melbourne should be running that modelling with you now, while there is still time to change the direction of contributions.
Frequently Asked Questions
When does Division 296 start?
Division 296 applies from 1 July 2026, so the 2026-27 financial year is the first year it captures. The measure became law on 13 March 2026 when the Treasury Laws Amendment (Building a Stronger and Fairer Super System) Act 2026 and the accompanying imposition Act received royal assent, following the redesign announced on 13 October 2025. Funds calculate relevant super earnings for their members and report those amounts to the ATO, which then issues the assessment to the individual.
How is Division 296 tax calculated?
The tax applies an extra 15% to the earnings attributable to the part of your total super balance above the large super balance threshold of $3 million, and a further 10% to the earnings attributable to any part above the very large super balance threshold of $10 million, so that top slice carries 25%. Only the earnings on the excess are taxed, not your whole balance. In practice the assessment works out the proportion of your balance above each threshold and applies that proportion to your earnings for the year. This estimator uses that same proportional method as a general guide.
Does Division 296 tax unrealised gains?
No. The original February 2023 proposal would have taxed movements in total super balance, which swept in unrealised gains. The version that became law in March 2026 was redesigned. Funds now calculate and report relevant super earnings, so the tax follows income and gains the fund has actually realised rather than paper increases in asset values. This is an important change for SMSF trustees holding property or other illiquid assets, because it removes the prospect of a tax bill on an asset that has not been sold and has produced no cash.
Are the $3 million and $10 million thresholds indexed?
Yes. Both the large super balance threshold and the very large super balance threshold are indexed in line with CPI. For the 2026-27 financial year they are $3 million and $10 million respectively. Indexation matters for planning, because a balance sitting just under the threshold today may stay under it for longer than a simple projection suggests, and the modelling should account for it rather than assuming the thresholds are fixed forever.
I have less than $3 million in super. Am I affected?
If your total super balance is at or below $3 million, Division 296 does not apply to you. The additional tax only touches the earnings on the portion of a balance above $3 million. That said, if your balance is growing and could cross the threshold, or if you are making large contributions, it is worth modelling now so you can plan contributions and structure decisions before the tax starts to bite.
How accurate is this estimator?
It gives a reasonable general estimate using the proportional method at the heart of the rules, but it is not a substitute for a formal calculation. The actual assessment adjusts your total super balance for contributions and withdrawals during the year, indexes the thresholds, applies the new total super balance value concept, and allows negative earnings to be carried forward against future years. Because the numbers involved are large, a small difference in method can move the result. For a precise figure, speak with our team.
General Advice Disclaimer: This calculator provides general information only and does not constitute tax or financial advice. It is a simplified estimate of Division 296 tax based on the law as enacted on 13 March 2026 and applying from 1 July 2026, and does not account for adjustments to your total super balance, threshold indexation, negative earnings carry-forward, or circumstances specific to you. Your actual liability will depend on the full facts of your situation. Before acting, obtain advice from a registered tax adviser. Pinnacle Accounting & Advisory is a registered tax agent and CPA firm advising business owners and SMSF trustees across Australia.
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