Superannuation tax changes 2026: Prepare for the new rules before July 1
From 1 July 2026, major superannuation tax reforms in Australia will change how high super balances are taxed, with a strong focus on fairness and long-term system sustainability.
The key highlight is ๐๐ข๐ฏ๐ข๐ฌ๐ข๐จ๐ง 296, a new tax targeting individuals with super balances above $3 million.
While this reform mainly impacts high-balance members, it also introduces broader compliance, reporting, and planning considerations for individuals, trustees, and SMSFs.
๐๐๐ฒ ๐๐๐ค๐๐๐ฐ๐๐ฒ๐ฌ
โ Division 296 introduces an additional 15% tax on earnings above $3M
โ A second threshold may apply for balances above $10M
โ Payday Super starts from 1 July 2026
โ Super on Parental Leave Pay begins from 1 July 2025
โ LISTO changes aim to support low-income earners
โ Early planning helps reduce tax impact & compliance risks
๐๐ก๐๐ญ ๐ข๐ฌ ๐๐ข๐ฏ๐ข๐ฌ๐ข๐จ๐ง 296?
Division 296 is a new tax rule under the Income Tax Assessment Act 1997.
It applies only to earnings linked to the portion of your super balance exceeding $3 million.
๐๐จ๐ฐ ๐ข๐ญ ๐ฐ๐จ๐ซ๐ค๐ฌ
โ Applies an extra 15% tax on applicable earnings
โ Does not tax your full balance
โ Applies at the individual level (not fund level)
๐๐๐ฑ ๐๐ฆ๐ฉ๐๐๐ญ
Accumulation phase โ Up to 30% tax on excess earnings
Retirement phase โ Previously 0%, now 15% tax may apply
๐ This effectively reduces tax concessions for large super balances
๐๐๐ฐ ๐๐ฉ๐๐๐ญ๐๐ฌ ๐ข๐ง ๐๐ข๐ฏ๐ข๐ฌ๐ข๐จ๐ง 296 (2025 ๐๐ซ๐๐๐ญ)
1. ๐๐๐๐จ๐ง๐ ๐๐ก๐ซ๐๐ฌ๐ก๐จ๐ฅ๐ ($10๐+)
- Additional tax may apply to balances above $10 million
- Higher effective tax rate on large earnings
2. ๐๐๐ฐ ๐๐๐ฅ๐๐ง๐๐ ๐๐๐ฅ๐๐ฎ๐ฅ๐๐ญ๐ข๐จ๐ง
- Based on higher of start or end-of-year balance
- Temporary spikes may trigger tax
3. ๐๐๐ ๐๐ง๐๐๐ฑ๐๐ญ๐ข๐จ๐ง
- $3M threshold increases in $150K increments
- $10M threshold increases in $500K increments
4. ๐๐๐๐ฅ๐ข๐ณ๐๐ ๐๐๐ซ๐ง๐ข๐ง๐ ๐ฌ ๐๐ง๐ฅ๐ฒ
- Tax applies only to actual (realized) gains
- Removes complexity of unrealized gains
5. ๐๐ซ๐-2026 ๐๐๐ข๐ง๐ฌ ๐๐ฑ๐๐ฆ๐ฉ๐ญ
- Capital gains before 30 June 2026 are excluded
- Reduces impact on long-term investors
6. ๐๐ช๐ฎ๐๐ฅ ๐๐๐ฑ ๐๐ฎ๐ฅ๐๐ฌ
- Same treatment for:
- โ SMSFs
- โ Defined benefit funds
7. ๐๐๐ฅ๐๐ฒ๐๐ ๐๐ญ๐๐ซ๐ญ
- Effective from 1 July 2026
- First assessment: 30 June 2027
๐๐ญ๐ก๐๐ซ ๐๐ฎ๐ฉ๐๐ซ ๐๐ก๐๐ง๐ ๐๐ฌ ๐ข๐ง 2026
๐๐๐ฒ๐๐๐ฒ ๐๐ฎ๐ฉ๐๐ซ
โ Employers must pay super with wages (not quarterly)
โ Improves employee retirement savings
โ Reduces unpaid super risk
๐๐ฎ๐ฉ๐๐ซ ๐จ๐ง ๐๐๐ซ๐๐ง๐ญ๐๐ฅ ๐๐๐๐ฏ๐
โ Starts 1 July 2025
โ 12% contribution on government leave pay
โ Paid as a lump sum with interest
๐๐๐๐๐ ๐๐ก๐๐ง๐ ๐๐ฌ (๐๐ซ๐จ๐ฉ๐จ๐ฌ๐๐)
โ Income threshold: $37K โ $45K
โ Max benefit: up to $810
โ Supports low-income earners
๐๐จ๐ฐ ๐ญ๐จ ๐๐ซ๐๐ฉ๐๐ซ๐ ๐๐จ๐ซ 2026 ๐๐ก๐๐ง๐ ๐๐ฌ
โ Review your total super balance (TSB)
โ Monitor investment earnings & timing
โ Plan asset sales carefully (realized gains matter)
โ Ensure accurate SMSF reporting
โ Seek professional advice early
๐๐ก๐ฒ ๐๐ก๐ข๐ฌ ๐๐๐ญ๐ญ๐๐ซ๐ฌ
These changes signal a shift toward:
โ Stricter ATO compliance
โ Reduced tax benefits for large balances
โ Increased reporting requirements for SMSFs
Even if youโre not above $3M, planning now can prevent future tax surprises.
๐๐๐๐ ๐๐ฑ๐ฉ๐๐ซ๐ญ ๐๐ฎ๐ข๐๐๐ง๐๐?
At ๐๐ข๐ญ๐๐ง ๐๐๐ฑ, we help you:
โ Structure your super efficiently
โ Minimise tax exposure
โ Stay compliant with new regulations
โ Manage SMSF reporting & strategy
๐ ๐๐๐ญ ๐ข๐ง ๐๐จ๐ฎ๐๐ก
๐ 0457 696 620
๐ง info@titantax.com.au
๐ https://titantax.com.au/
๐ Book your super review today and stay ahead of 2026 tax changes!
