If you have a large amount in superannuation, or you’re heading that way, you’ve probably seen the headlines about Division 296. From 1 July 2026 there’s an extra tax on the earnings tied to very high super balances. Here’s what it actually means, who it touches, and what to do if you might be in range.
What Division 296 is
Division 296 adds an extra 15% tax on the earnings attributable to the part of your total super balance above $3 million.
Your fund already pays 15% on its earnings. For the portion of your balance over $3 million, this new tax sits on top, so the effective rate on that slice lands around 30%. The first $3 million keeps being taxed the way it always has been. Only the amount above the threshold is affected.
So it isn’t a tax on your whole balance. It applies to the earnings linked to the part sitting above the line.
Who it actually affects
Not many people. The government estimates it hits roughly 80,000 individuals, which is under 0.5% of super members. These are people with very large balances.
If your super is comfortably under $3 million, this change doesn’t apply to you and there’s nothing you need to do.
The people who should pay attention are those near or above the threshold. That often includes:
- Business owners who’ve built up strong super balances over a long career
- SMSF trustees, particularly funds holding commercial property, business premises or other large single assets
- Anyone whose balance sits just under $3 million but is growing
That last group matters more than people realise. A fund holding a single property can cross the threshold as the asset value climbs, even without you adding a dollar.
Why the detail is worth taking seriously
The way the tax is calculated has been debated publicly, and the finer mechanics are complex. We’d rather give you the honest version than a false sense of precision: the high-level picture above is settled, but the exact workings are still bedding down.
That’s exactly why this isn’t a calculation to attempt on the back of an envelope. If your balance is near or above $3 million, the sensible move is to have your fund reviewed properly by someone who can look at your specific numbers.
What to do if you might be near the threshold
Start with one question: is your total super balance close to, or above, $3 million? If you’re not sure, that’s the first thing to pin down.
From there, a few things are worth working through with your accountant and adviser:
Get a clear read on your balance and where it’s trending. For SMSF trustees especially, asset valuations drive whether you cross the line. Knowing your position now beats finding out at tax time.
Review how your fund is structured. SMSF setup and ongoing compliance is core to how we work with business owners, and the right structure matters more when a balance is large. We can look at whether your current arrangement still suits you.
Fold it into your bigger plan. For many business owners, super sits alongside succession planning: how you eventually step back, what happens to the business, and how wealth moves to the next generation. Division 296 is one input into that, not the whole story.
Get advice that covers investments, not just tax. Decisions about what to hold in super, and whether super is still the right home for every dollar, are financial planning questions. We work with our partners at Merchants of Wealth on that side, so the tax view and the investment view line up rather than pulling against each other.
None of this needs to happen in a panic. You’ve got time to look at it calmly and make good decisions.
Talk it through with us
If you’ve got a large super balance, or you’re building towards one, we can review where you stand and what Division 296 means for you specifically. No guesswork, just a clear read on your position.
Book a free first consultation or call us on 1300 226 722.
This article is general information only and doesn’t take your personal circumstances into account. It isn’t personal financial or tax advice.
This article is part of our complete 2026-27 guide to small business tax in Australia.
