--- title: Division 296 Tax Explained - What It Means for Large Balances description: Division 296 changes how super earnings are taxed from July 2026. Understand the thresholds, the calculation, and your next steps. image: https://trekkadvisory.com.au/hubfs/division-296-tax-explained-april.png --- [!["Trekk Advisory" logo: bold black "Trekk" in modern font with smaller red "ADVISORY" below on a white background.](https://trekkadvisory.com.au/hs-fs/hubfs/Logos/trekk-advisory-logo-black%201.png?width=150&height=75&name=trekk-advisory-logo-black%201.png "\"Trekk Advisory\" logo: bold black \"Trekk\" in modern font with smaller red \"ADVISORY\" below on a white background.")](https://trekkadvisory.com.au) - [Featured services](https://trekkadvisory.com.au/how-we-help) - [Business accounting](https://trekkadvisory.com.au/small-business-accountants) - [Clarity Bookkeeping](https://trekkadvisory.com.au/clarity-bookkeeping) - [Xero cloud accounting](https://trekkadvisory.com.au/xero-cloud-accounting) - [Advice + business advisory](https://trekkadvisory.com.au/business-advisory-services) - [Tax minimisation + planning](https://trekkadvisory.com.au/tax-minimisation-and-planning) - [Self-managed super funds](https://trekkadvisory.com.au/self-managed-super-funds) - [Business Valuations](https://trekkadvisory.com.au/business-valuations) - [How we help](https://trekkadvisory.com.au/how-we-help) - [Understand your numbers](https://trekkadvisory.com.au/how-we-help/understanding) - [Grow your numbers](https://trekkadvisory.com.au/how-we-help/growth) - [Leverage your numbers](https://trekkadvisory.com.au/how-we-help/leverage) - [Who we are](https://trekkadvisory.com.au/our-team) - [Resources](https://trekkadvisory.com.au/information-centre) - [Get in touch](https://trekkadvisory.com.au/contact) - QLD - [Brisbane](https://trekkadvisory.com.au/brisbane) - [Gympie](https://trekkadvisory.com.au/gympie) - [North Queensland](https://trekkadvisory.com.au/north-queensland) - [Rockhampton](https://trekkadvisory.com.au/rockhampton) - NSW - [Northern Rivers](https://trekkadvisory.com.au/northern-rivers) [Download: Success Checklist](https://trekkadvisory.com.au/business-success-checklist) ![](https://trekkadvisory.com.au/hubfs/division-296-tax-explained-april.png) April 02, 2026 By Tony Madden # Division 296 Tax Explained - What It Means for Large Balances ##### Share: - - - From 1 July 2026, proposed changes to superannuation tax concessions, commonly referred to as Division 296, are expected to impact individuals with larger super balances. While the measure targets a relatively small group, it introduces new considerations around how superannuation is taxed, structured, and managed over time. If your super balance is approaching the proposed thresholds, it is worth understanding how the rules are intended to apply and what this could mean in practice. For a broader overview of the changes, you can also read our earlier update on [Division 296 super tax changes](https://trekkadvisory.com.au/information-centre/division-296-super-tax-update-what-you-need-to-know). ### Why Division 296 Has Been Introduced The aim of Division 296 is to better target superannuation tax concessions. Rather than changing the system broadly, the focus is on individuals with higher balances, with the intention of limiting the level of concessional tax treatment on earnings above certain thresholds. This reflects a broader shift toward balancing long-term sustainability with fairness across the system. ### Who the Changes May Apply To Based on current legislation, the measure is intended to apply to individuals with total superannuation balances above $3 million. In broad terms: - Balances up to $3 million continue under existing tax settings - Earnings attributable to balances above $3 million may be subject to an additional 15% tax This would bring the effective tax rate on those earnings to up to 30%, depending on the circumstances. Importantly, the tax applies at an individual level rather than at the fund level. ### How the Tax Is Expected to Work Division 296 introduces a different way of calculating tax on super earnings. Rather than relying solely on realised income, the calculation is based on changes in a member’s total super balance over the year, with adjustments for contributions and withdrawals. This means: - Unrealised gains may be included in the calculation - Market movements can influence the tax outcome, even without asset sales The ATO is responsible for calculating the liability and issuing assessments to affected individuals. The tax can then be paid personally or released from super. ### Key Considerations for SMSFs For those with self-managed super funds, the introduction of Division 296 may add another layer of complexity. Considerations may include: - Valuation of assets, particularly where investments are not frequently traded - Timing of transactions and how gains are recognised - Administrative and reporting requirements This does not necessarily mean SMSFs are less effective but it does mean greater attention to detail will be required. You can explore how this fits into your broader strategy through [self-managed super fund advice](https://trekkadvisory.com.au/self-managed-super-funds). ![division-296-tax-explained-april](https://trekkadvisory.com.au/hs-fs/hubfs/Blog%20Images/Imported_Blog_Media/division-296-tax-explained-april.png?width=300&height=300&name=division-296-tax-explained-april.png) ### Planning Ahead - What Matters Most At this stage, the focus should be on awareness and preparation, not reaction. If your super balance is near or above $3 million, it may be worth: - Reviewing your current position and projected growth - Understanding how different investment scenarios may impact outcomes - Considering how super fits within your broader wealth strategy In some cases, this may lead to discussions around diversification of investment structures or timing of future contributions. ### Looking at the Bigger Picture Superannuation remains one of the most tax-effective structures available. Division 296 does not remove that but it does change the way benefits apply at higher balance levels. For many individuals, the question is not whether super is still effective, but how it fits alongside other structures and long-term goals. This is where aligning your super strategy with broader advice becomes important, particularly where retirement planning, estate considerations, and investment decisions overlap. ### The Bottom Line Division 296 is a targeted change that will only impact a small proportion of individuals, but for those affected, it introduces a shift in how super earnings are taxed. The key is to stay informed, understand how the rules apply to your situation, and plan early. With the right advice, you can continue to use super effectively as part of your long-term strategy while adapting to the evolving landscape. If you would like to understand how these changes may apply to you, it is worth reviewing your position sooner rather than later. [Contact Trekk Advisory](https://trekkadvisory.com.au/contact) to explore your options and plan ahead with confidence. [![Still guessing at your tax bill? Our free No-Stress Tax Guide 2026 breaks down 12 smart, practical ways to legally lower what you owe before EOFY - no jargon, no fluff. �� Download it free here](https://no-cache.hubspot.com/cta/default/21206577/interactive-211065252141.png)](https://trekkadvisory.com.au/hs/cta/wi/redirect?encryptedPayload=AVxigLLjdCz46znkrUftdQkfvCI1V%2BmAoAX%2FpMI4ZK8s5HbZVCO3qsr3gUneFQj7th98IW4x4wfr05Bn5a334OtTwYvR7H%2Fkd7fH5q3YD20SGnuMPaP%2B41wfOO3MAVVECAOX%2BtjqXoTscv8eIZNIZ1ocdyYP0EuIMSXlXEu8RJppR%2FP1THTUgmkwQ27kfw0YKcNiaAx7QEaxuB760BSQ0qMfDLWLYQ%3D%3D&webInteractiveContentId=211065252141&portalId=21206577) --- *Trekk Advisory provides accountant-led tax, bookkeeping, and advisory services for Australian business owners. This article is general in nature and does not constitute personal advice. Please speak with a qualified adviser regarding your specific circumstances. * #### About Author [Tony Madden](https://trekkadvisory.com.au/information-centre/author/tony-madden) Tony is a director of Trekk and based in our Brisbane office. He works heavily in the advisory space for his clients, focusing on strategic management consulting, mentoring, and resource planning with a driver of making a difference in their businesses and lifestyle. Tony has key strengths in building teams and is an active listener in working to address the pain points in clients' businesses. He had a passion for small business from a young age due to being brought up with a family of business owners. He's worked with larger corporations and not-for-profits, but he's always drawn back to helping and supporting small to medium (SME) businesses. That's why he's a Director of Trekk, because supporting SME is something we are all passionate about here. Outside of work, Tony has an active family with three sons that love sports, music and socialising. He enjoys having a drink and some laughs with mates and working on restoring his old EH Holden. He’s a passionate Eels NRL and Reds Rugby supporter with a love of vintage and muscle cars, 80’s Rock and keen runner (for the mind & body), Tony also has a laugh by 'acting the goat' at any event where he can embarrass his kids. #### Related Posts [![Two Trekk Advisory team members in hard hats talking at a construction site.](https://trekkadvisory.com.au/hubfs/Blog%20Images/ato-prefill-contractors-tpar-sept-blog.png)](https://trekkadvisory.com.au/information-centre/new-ato-pre-fill-for-contractors-the-gaps-you-still-need-to-fill) September 19, 2026 #### [New ATO Pre-Fill for Contractors: The...](https://trekkadvisory.com.au/information-centre/new-ato-pre-fill-for-contractors-the-gaps-you-still-need-to-fill) For the first time, contractors in certain industries will see their income partly filled in for... 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