Division 296 legislation takes effect from 1 July 2026, imposing additional tax of up to 25% on earnings attributable to total super balances exceeding $3 million, with the ATO set to issue assessments during the 2027–28 financial year.
The Australian Taxation Office (ATO) announced on 7 July 2026 that the Better Targeted Super Concessions (Division 296) are now law and will come into effect for the 2026–27 financial year onwards.
That means from 1 July 2026, individuals with TSBs above the:
- Large super balance threshold (LSBT) — set at AUD 3 million for 2026–27 — will be subject to an additional 15% tax on the proportion of earnings relating to their TSB exceeding the LSBT.
- Very large super balance threshold (VLSBT) — set at AUD 10 million for 2026–27 — will be subject to an additional 10% tax on the proportion of earnings relating to their TSB exceeding the VLSBT.
Individuals with TSBs above these thresholds should use the ATO’s Division 296 web guidance to find out everything they need to know.
Here are some of the changes to expect:
When a fund reports an account balance to the ATO for the 2026–27 financial year, the ATO will calculate the TSB. If it exceeds the LSBT or VLSBT, the ATO will use the relevant super earnings, reported by the funds, to calculate Division 296 tax and issue a notice of assessment.
The ATO will begin issuing Division 296 assessments later in the 2027–28 financial year.
The way that TSBs are calculated is also changing as a result of Division 296 legislation. For the latest on calculating a TSB for 2026–27,
See the ATO’s Total superannuation balance information.
The ATO strongly recommends that affected individuals:
- Use the information on the ATO website to prepare
- Discuss the implications of Division 296 and the new way of calculating TSBs with a tax agent.
