The Australian Government has announced several important updates to its proposal to apply an additional tax on earnings linked to total superannuation balances above AU$3 million. These refinements aim to improve fairness, simplify compliance, and ensure that the policy is practical for funds and members once implemented.
The revised framework introduces a more streamlined approach to assessing additional tax liabilities and includes new thresholds designed to better target high-balance accounts.
Key Updates Under the Revised Proposal
Shift to a Realised-Earnings Basis
Instead of taxing unrealised gains (as previously proposed), the Government will now adopt a realised-earnings approach.
This means additional tax will apply only to actual earnings, providing greater clarity, fairness, and alignment with standard tax principles.
Commencement Date Extended to 1 July 2026
The start date has been pushed back to 1 July 2026, allowing more time for industry consultation and smoother implementation across super funds and members.
New Two-Tier Threshold Structure
To ensure proportionality, the proposal now introduces a second threshold:
- Balances above AU$3 million: Total concessional tax rate capped at 30%
- Balances above AU$10 million: Total concessional tax rate increased to 40%
This two-tier system is designed to target those with significantly higher balances while keeping settings stable for most Australians.
Indexation of Both Thresholds
The AU$3 million and AU$10 million thresholds will now be indexed, preventing bracket creep and ensuring the tax applies fairly relative to inflation and long-term superannuation growth.
Why These Changes Matter
The refinements address several concerns raised during industry consultation, including the need for:
- More accurate and equitable tax outcomes
- Reduced administrative burden
- A tax structure more aligned with realised economic gains
- Fairer treatment for members with illiquid assets or volatile performance
By shifting away from unrealised gains and implementing tiered taxation, the Government aims to balance equity, transparency, and practicality.
Who Will Be Affected?
The updated policy affects individuals with superannuation balances exceeding AU$3 million, with the greatest impact on those holding very large balances above AU$10 million.
Most Australians — including the majority of workers and retirees — will not be affected by these changes.
What This Means for Superannuation Members
Superannuation members with higher balances should consider:
- Reviewing their long-term retirement strategy
- Assessing asset mix, liquidity, and tax implications
- Understanding how realised earnings will be calculated
- Preparing for potential additional tax obligations from 1 July 2026
Financial and tax advice may be required to navigate the updated rules effectively.
How BOA & Co. Chartered Accountants Can Help
At BOA & Co., we guide high-net-worth individuals, trustees, and businesses in managing superannuation tax implications, including:
- Superannuation tax planning and compliance
- Advisory on high-balance super strategies
- Retirement and wealth structuring
- Tax modelling for the new 2026 super tax framework
Our Sydney-based team provides tailored support to ensure clients stay informed and prepared for upcoming reforms.
The Bottom Line
The Government’s revised plan introduces a more balanced, transparent, and targeted approach to taxing high superannuation balances.
By shifting to realised earnings, extending the commencement date, indexing thresholds, and applying a two-tier tax structure, the updated framework improves fairness while maintaining revenue integrity.
For individuals with large super balances, now is the ideal time to review your strategy and ensure you’re positioned for the 2026 changes.
📞 Contact BOA & Co. Chartered Accountants for expert guidance on superannuation tax, wealth planning, and regulatory changes.
📧 [email protected]
🌐 www.boanco.com.au
📍 Sydney, NSW
Smart structure. Sustainable growth. Strategic tax outcomes.