Doctor’s income

In the 2013 financial year the government introduced Division 293; it’s effectively a tax on high income earners as it requires you to pay an additional 15% tax on your superannuation contributions if your adjusted income exceeds $300K.

To understand if you’re liable to pay this additional tax it’s not as simple as saying my taxable income is less than $300k. What you’ll notice in the table and graphic below is that your taxable income is merely the starting point of the calculation; you need to add back things like reportable fringe benefits, rental losses and salary sacrificed superannuation to get to your Adjusted Income. The example is basic, but it gives you idea of how Div 293 might apply to you.

Example 1 Example 2
Taxable income 260,000 280,000
Plus – Reportable Fringe Benefits 15,000
Plus –  Rental Losses (negatively geared) 7,000 14,000
Plus –  Other Investment Losses (margin loan) 6,000
Plus – Salary Sacrificed Superannuation  – 3,400
Plus – Super Contributions 24,700 26,600
Total Div 293 income 306,700 330,000
Less Threshold 300,000 300,000
Excess contribution 6,700 30,000
Additional 15% tax on superannuation contribution 1,005 4,500

Importantly if you owe Div 293 tax, you can choose to pay it out of your own money or from your super fund.

One of the best ways to address the Div 293 issue or concerns is through a taxation planning meeting in conjunction with our Wealth & Risk Management division, we will address this issue with you and outline the best possible outcomes for you.

Book a meeting with our practice to learn more about Div 293.

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