Do you have more than $3 million in your super? A new measure known as Division 296 this opens in a new window may affect you. From 1 July 2026, an additional tax may apply if your total super balance (TSB) this opens in a new window is over $3 million at the end of the year. It’s important to note – this won’t apply to your whole super balance, only the earnings linked to the amount of your TSB that is above $3 million.
How does Division 296 tax work?
If Division 296 tax applies to you, the way some of your super earnings are taxed may change. Here’s how it works for the 2026-27 financial year:
If your TSB at the end of the year is above the large super balance threshold (LSBT) (set at $3 million for 2026-27), you’ll be taxed 15% on the proportion of super earnings over this threshold.
If your TSB at the end of the year is above the very large super balance threshold (VLSBT) (set at $10 million for 2026-27), you’ll pay an additional tax of 10% on the proportion of super earnings that exceed the VLSBT.
In future years:
We will check whether your TSB both just before the start of the year and at the end of the year is over the LSBT, and use the greater of the two.
Both the LSBT and VLSBT may be indexed in future years in line with the consumer price index.
Will my super fund be impacted?
If your TSB exceeds the LSBT, your fund will report your relevant super earnings to us which we’ll then use to calculate your Division 296 tax.
For APRA regulated funds, we will let them know if they have to report this to us. For SMSFs, if your balance in the SMSF is above the LSBT. The SMSF will know they need to report this to us. You should let your SMSF know if you have other super funds and if your TSB will exceed the LSBT so they know they need to report this information to us.
When will Division 296 tax assessments start to issue?
Division 296 tax Notice of Assessments for the 2026-27 financial year will be sent in the latter half of 2027-2028 financial year, once your relevant super earnings have been reported to us by your super fund.
