By Philippa Billings, Chief Advice Officer, Otivo
Take a household with two incomes — one on $230,000, one on $80,000 — with some money left over each month and a shared assumption about where it goes. Put it in the high earner's super. The tax saving is bigger up there, so the dollar works harder. It's the obvious answer, and it's wrong often enough to be worth checking, because at $230,000 a quiet threshold has already been crossed that removes most of the advantage. Here's what actually decides which account an extra contribution does more in.
Super contributions for couples are assessed individually, not as a household. The value of an extra contribution depends on each partner's marginal tax rate, their total super balance, and the thresholds that apply to each. As at August 2026, the combined concessional contributions cap is $32,500 per person for 2026–27.
Why isn't the higher earner automatically the right answer?
Because the tax advantage of a concessional contribution isn't the marginal rate. It's the gap between the marginal rate and the rate the contribution is taxed at inside the fund.
Concessional contributions are generally taxed at 15% on the way into super. For someone paying 32 cents in the dollar on their top slice of income, that's a 17-percentage-point difference. For someone paying 47 cents, it looks like a 32-point difference — which is where the assumption comes from.
The assumption holds right up until combined income and concessional contributions reach $250,000, at which point a second tax cuts in and the gap narrows sharply.
How does Division 293 change the maths above $250,000?
Division 293 applies an additional 15% tax on concessional contributions for individuals whose combined income and concessional contributions exceed $250,000 in a financial year, bringing the total tax on those contributions to 30% rather than 15%.
Income for the Division 293 threshold isn't just salary. It includes taxable income, reportable fringe benefits, net investment losses, and the concessional contributions themselves. That last inclusion is what catches people out.
Run it on the household above. A salary of $230,000 attracts super guarantee at 12% of ordinary time earnings, which is $27,600. Add the two together and the total is $257,600 — already $7,600 past the threshold before a single dollar of voluntary contribution is made. Every extra concessional dollar from that point is taxed at 30% going in, not 15%.
An important point, because it's frequently misread. Division 293 doesn't make concessional contributions unattractive. At 30%, a contribution is still taxed well below the top marginal rate, and it remains a concessional contribution in every sense. What it does is shrink the difference between the two partners.
The seventeen-point coincidence
Here's the arithmetic that makes this article worth the reading time. Using ATO rates for 2026–27, the two partners in that household end up with an almost identical advantage.
The higher earner on $230,000 sits in the 45% marginal bracket, plus the 2% Medicare levy — 47 cents in the dollar. With Division 293 applying, the contribution is taxed at 30%. The gap is 17 percentage points.
The lower earner on $80,000 sits in the 30% marginal bracket, plus the 2% Medicare levy — 32 cents in the dollar. The contribution is taxed at 15%. The gap is also 17 percentage points.
Two very different salaries, the same concessional advantage per dollar. Once the higher earner crosses $250,000, the tax argument for favouring their account largely dissolves, and the decision moves onto entirely different ground — balances, access ages, and caps.
Which low-income super concessions actually apply, and at what income?
This is where households tend to be disappointed, so the thresholds are worth stating precisely. The concessions designed to reward contributions to a lower earner's account are income-tested well below what most people assume.
The government co-contribution can pay up to $500 into super where a personal contribution is made without claiming a deduction, and the member's income is under $64,293 for 2026–27, with a total super balance below $2.1 million at the previous 30 June.
The spouse contribution tax offset is worth up to $540 — 18% of contributions up to $3,000 — where the receiving spouse's income is under $37,000, phasing out entirely at $40,000. The receiving spouse's total super balance must be below $2.1 million at the previous 30 June.
The low income super tax offset refunds up to $500 of contributions tax for members with income up to $37,000, and it's applied automatically by the ATO rather than claimed.
On $80,000, none of the three is available. That's the honest answer for the household in this example, and it's the answer for a great many two-income households where the "lower" earner is only lower in relative terms. These concessions are built for a spouse on a part-time wage, out of the workforce, or on parental leave — not for the second income in a $310,000 household.
How does total super balance change who can contribute what?
The caps are per person, which is the quiet argument for spreading contributions rather than concentrating them.
Both partners have their own combined concessional contributions cap of $32,500 for 2026–27, covering employer super guarantee, salary sacrifice and personal deductible contributions together. It's one limit across all three, not three separate allowances — and for the higher earner, $27,600 of it is already used by SG alone, leaving roughly $4,900 of room. The lower earner on $80,000 receives about $9,600 in SG, leaving considerably more.
Both also have their own general transfer balance cap of $2.1 million for 2026–27, which limits how much can be moved into retirement phase. Two moderate balances can carry more into the tax-advantaged retirement phase than one large balance and one small one.
The $32,500 figure is the general annual cap rather than a hard ceiling. Members eligible for carry-forward can have a higher effective cap in a given year.
Carry-forward mechanics
- Carry-forward has been available since 1 July 2018.
- Unused concessional cap amounts can be carried forward for up to five financial years.
- Unused amounts are used oldest first and expire after five years.
Carry-forward eligibility — all three conditions must be met
- Total super balance below $500,000 on 30 June of the prior financial year.
- Unused concessional contributions cap space in one or more of the previous five financial years.
- Eligible to make super contributions, which generally means being under age 75. Funds can accept contributions up to 28 days after the end of the month in which a member turns 75.
For a household where one partner has a much smaller balance, that $500,000 threshold is often the deciding factor — the partner with the smaller balance may have several years of unused cap available, while the partner with the larger balance has none.
One requirement applies wherever personal deductible contributions are involved. A valid notice of intent to claim a deduction must be lodged with the fund before the earlier of the day the individual lodges their tax return for that financial year, or the end of the financial year after the contribution was made — and the fund must acknowledge the notice before the deduction can be claimed. Missing that step means no deduction, regardless of how well the rest of the arrangement was set up.
The four thresholds that decide the answer
Stripped back, four numbers do most of the work in this decision.
- $250,000 — the Division 293 threshold, which compresses the gap between a high earner and a middle earner.
- $64,293 and $37,000 — the co-contribution and spouse offset income limits, which decide whether the low-income concessions are on the table at all.
- $500,000 — the carry-forward total super balance threshold, which often favours the partner with less super.
- $2.1 million — the general transfer balance cap that each partner holds separately, which is the long-run case for two balanced accounts.
Frequently asked questions
Can super be split between partners?
Contributions splitting allows a member to apply to their fund to transfer certain contributions made in a financial year to their spouse's account, subject to the fund offering it and the ATO's rules. It's separate from making a spouse contribution, and it doesn't create extra cap space.
Does a spouse contribution count towards the receiving partner's caps?
Yes. A spouse contribution is a non-concessional contribution for the receiving spouse and counts towards their non-concessional cap, which is $130,000 for 2026–27, with a bring-forward of up to $390,000 subject to age and total super balance conditions.
Does Division 293 tax come out of super or out of pocket?
The ATO issues an assessment to the individual, who can pay it personally or elect to release the amount from their super. Both options are available.
What happens if contributions exceed the concessional cap?
The excess is included in the individual's assessable income and taxed at their marginal rate, with a 15% tax offset for the tax already paid by the fund, and an excess concessional contributions charge applies. Up to 85% of the excess can be elected for release from the fund.
Where this leaves you
The household version of this question has no general answer, because it turns on four thresholds and two sets of personal numbers. What can be said is that the instinct to load everything into the higher earner's account rests on an advantage that Division 293 substantially removes once combined income and contributions pass $250,000. When Otivo customers follow the platform's contributions advice in full, they could be better off on average by $180,356 in today's dollars by retirement — a figure that comes from getting the split and the timing right rather than from contributing more. Otivo, a licensed Australian financial advice platform holding AFSL and Australian Credit Licence No. 485665, has a salary sacrifice module and a tax-deductible personal contributions module that work from income, age, existing contributions and household surplus, which is where a two-account question becomes two sets of figures.
Sources
- Australian Taxation Office — contributions caps, Division 293 tax, carry-forward concessional contributions, notice of intent, super co-contribution, spouse contributions tax offset, low income super tax offset, and individual income tax rates — ato.gov.au
- ASIC MoneySmart — super contributions — moneysmart.gov.au
Disclaimer
The information in this communication is current as at August 2026 and has been prepared by Otivo Pty Ltd ABN 47 602 457 732, AFSL and Australian Credit Licence No. 485665. This content is general information only and has been prepared without taking into account your objectives, financial situation or needs. It is not personal financial or taxation advice and should not be relied on as such. Before acting on any information, you should consider its appropriateness having regard to your personal circumstances. This material must not be reproduced in whole or in part, or posted on any social media platform, without the prior written consent of Otivo Pty Ltd.