Division 296: The $3m Super Threshold Most Won't Reach

Division 296 tax starts in July 2026. If you earn $200k with SGC contributions your whole career, will you trigger the $3 million threshold?

The numbers tell a clear story: most high-income earners won't get close.

What Division 296 Actually Is

Division 296 introduces a threshold, not a cap. Starting July 2026:

• If your total super balance exceeds $3 million, earnings on the excess portion are taxed an additional 15%

  
  

• Normal super earnings tax: 15%. With Division 296: 30% on the portion above $3m

  
  

• Only the proportion of earnings attributable to your balance above $3m gets the extra tax. So if your balance is $4 million and you earn $100k earnings then your will be taxed an additional $100k * 25% * 15% = $3,750

  
  

• The threshold is indexed in $150k increments

• This is softer than initially proposed as unrealised gains are excluded

  
  

The Numbers: Who Actually Gets There?

We modelled someone earning $200k (with full SGC contributions) across different return scenarios. Here's how much super you'd need at age 60 to hit the $3m threshold, compared to the average Australian:

Age Group	Average Balance (APRA)*	Required Balance (4.5% return)	Required Balance (6.5% return)	Required Balance (8% return)
30–34	$52,700	$1,197,600	$516,400	$234,700
35–39	$85,100	$1,424,600	$734,900	$422,700
40–44	$118,700	$1,583,200	$935,400	$616,600
45–49	$151,900	$1,824,400	$1,215,200	$890,100
50–54	$190,500	$2,051,200	$1,517,400	$1,209,500
55–59	$234,700	$2,250,800	$1,831,500	$1,570,800
60–64	$263,400	$2,514,700	$2,236,900	$2,051,100

*Source: APRA Quarterly Superannuation Statistics (December 2025)

At age 60-64, the average super balance is $263,400. Even with strong 8% returns, you'd need $2,051,100 (7.8 times the average) to trigger Division 296.

With more conservative 6.5% returns, you'd need $2,236,900 or about 8.5 times the average.

The $3 million threshold gets headlines, but the numbers show most high-income earners won't reach it. Polis estimates about 87,000 Australians have more than $3m in super which is roughly 1.4% of those with superannuation balances in Australia.

So in summary, for most Australians this threshold will not impact them under the current law.

Notes on our calculations:

• CPI and AWOTE is assumed to be 2.5%

• Salary is assumed to increase by AWOTE

• All numbers are shown in present value terms (discounted by CPI)

• Super earnings is taxed at 15%