If your income exceeds $250,000 in a financial year, the ATO charges an extra 15% tax on your concessional super contributions under Division 293. For most consultant doctors, specialists, and senior GPs, this means your effective super contribution tax rate doubles from 15% to 30%. The charge is automatic and assessed annually — but there are strategies to reduce the impact.
What Division 293 Actually Is
Standard super contributions are taxed at 15% inside the fund. The idea is to make super attractive as a savings vehicle — 15% beats the 47% top marginal rate for high earners.
Division 293 was introduced to claw back some of that advantage for very high earners. If your income (including concessional contributions) tips over $250,000, the ATO applies a further 15% tax on whichever is smaller: your concessional contributions, or the amount of income above $250,000.
So if you earn $320,000 as a specialist and make $30,000 in concessional contributions, Division 293 applies to the full $30,000 — you get a $4,500 bill from the ATO.
Who Gets Caught
The $250,000 threshold catches more doctors than most people expect. The ATO counts:
- Taxable income (salary, practice income, locum fees)
- Reportable employer super contributions
- Reportable fringe benefits
- Total net investment losses
For a GP principal billing $350,000 through their practice, a registrar picking up extra shifts alongside specialist income, or a consultant on a staff contract — Division 293 is almost a certainty by mid-career.
The $250,000 threshold has not been indexed since the measure was introduced. Wage growth and specialist fee increases push more doctors past it every year without any change in policy.
How the ATO Collects It
The Division 293 assessment comes out of your annual tax return. You have two choices for how to pay:
Pay from your super fund. The ATO sends a release authority directly to your fund. The charge comes out of your balance automatically — no cash upfront required.
Pay personally. You pay the ATO directly and keep your super balance intact. This is generally the smarter move if you can manage the cash flow. The compounding benefit of leaving money in super is significant over a 20-30 year career.
The release authority option is easy, but it defaults you into reducing your super balance. Think about it before accepting it.
What You Can Actually Do About It
Division 293 is not avoidable if you earn above the threshold — but it can be managed.
Trim concessional contributions strategically. The charge only applies to concessional contributions. Reducing salary sacrifice reduces the base it is calculated on. This sounds obvious but requires careful modelling — super is still a tax-effective vehicle even at 30%, especially compared to paying 47% on the same income outside super.
Use after-tax (non-concessional) contributions instead. Non-concessional contributions are not subject to Division 293. If you have already hit the $30,000 concessional cap and want to put more into super, non-concessional contributions work differently — the contribution comes from post-tax income, but growth inside the fund is still taxed at concessional rates.
Time income carefully. If you are close to the $250,000 threshold — say you are earning $240,000 and considering a locum block — the additional income could trigger the Division 293 charge on your entire concessional contributions for the year. Some doctors factor this into decisions around extra shifts or one-off income.
Consider a corporate structure. Many doctors above $250,000 use a company or trust to hold some income, reducing personal taxable income. If your personal income sits below $250,000, Division 293 does not apply to contributions made from that structure. This gets complicated quickly and is an area for professional advice. As part of a broader tax strategy for medical professionals, structuring your income properly can make Division 293 significantly more manageable.
The Mistake Most Doctors Make
Many doctors get blindsided by Division 293 at tax time. The charge does not show up on payslips and is not deducted in real time — it lands as a lump-sum assessment when you lodge.
If your super fund automatically releases the amount before you have thought about it, that is not catastrophic — but it does mean your balance grows more slowly than it could have.
Set a reminder each year to check your projected Division 293 liability before lodgement. Your accountant should model it as part of mid-year tax planning, not as a surprise in August when assessments land.
A consultant cardiologist in Brisbane earning $450,000 reduced her Division 293 hit by shifting a portion of income into a service trust, keeping her personal taxable income just below the threshold. Combined with smart use of the non-concessional cap, she effectively added several thousand dollars per year back into long-term wealth building — without doing anything complicated.
Key Takeaways
- Division 293 applies a 15% surcharge on concessional super contributions when income exceeds $250,000
- Most consultant doctors and specialists will hit this threshold — and more will each year as the threshold is not indexed
- You can choose to pay from super or personally — paying personally preserves more long-term balance growth
- The charge only applies to concessional contributions, so strategy around non-concessional contributions and income timing can help
- Review your exposure mid-year so the assessment does not catch you off guard at tax time
Division 293 is one of those issues that looks unavoidable until you sit down and model it properly. Voyage Financial works exclusively with medical professionals and understands how to structure contributions, income, and tax to make super work harder across your career. Book a free strategy call and we will look at your numbers together.
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