Super Contribution Caps 2025-26: What Changed and How to Maximise Before EOFY

Super contribution caps are indexed periodically in line with Average Weekly Ordinary Time Earnings (AWOTE), and the 2025-26 financial year brought meaningful increases. Getting your head around these numbers is essential for effective tax and retirement planning.

The concessional contributions cap for 2025-26 is $30,000 per person. Concessional contributions include your employer's Superannuation Guarantee (SG) payments (11.5% of ordinary time earnings for 2025-26), any salary sacrifice contributions, and any personal contributions for which you claim a tax deduction. All of these count toward the single $30,000 cap.

The non-concessional contributions cap for 2025-26 is $120,000 per person. Non-concessional contributions are made from after-tax money — there's no tax deduction, but the money grows in super's concessional tax environment (15% on earnings, or 0% in pension phase). If you're under 75, you can also bring forward up to three years' worth of non-concessional contributions in a single year ($360,000), provided your Total Super Balance (TSB) is below $1.9 million.

The Total Super Balance threshold that affects various caps and eligibility rules is $1.9 million for 2025-26. If your TSB exceeds this at the prior June 30, you cannot make non-concessional contributions and your access to carry-forward provisions may be affected.

These caps represent the maximum — there's no requirement to contribute up to the cap. But for anyone in a position to do so, the tax benefits of maximising concessional contributions in particular are substantial.

The shift from the 2024-25 caps to 2025-26 caps reflected the indexation increases. The concessional cap moved to $30,000 (up from $27,500 in earlier years), and the non-concessional cap moved to $120,000 (up from $110,000). These may seem like incremental changes, but the additional cap space is meaningful — especially for higher earners looking to reduce their tax bill.

The Super Guarantee rate also increased to 11.5% for 2025-26, up from 11% the previous year. This matters for cap calculations because your employer's SG contributions eat into your $30,000 concessional cap. At 11.5% SG, an employee earning $130,000 receives approximately $14,950 in employer contributions, leaving $15,050 of concessional cap space for salary sacrifice or personal deductible contributions.

The SG rate is legislated to increase to 12% from 1 July 2026, which will further reduce the remaining cap space for salary sacrifice. This makes the 2025-26 year slightly more advantageous for voluntary concessional contributions than 2026-27 will be — another reason to act before June 30.

Another change worth noting: the government co-contribution income thresholds have been indexed upward, and the First Home Super Saver Scheme maximum releasable amount has increased to $50,000. If you're using the FHSSS to save for a first home, you now have more room to contribute.

The carry-forward rule is one of the most powerful and underused super strategies available. If you didn't use your full concessional contribution cap in any of the five previous financial years, you can carry forward the unused amounts and use them in the current year — provided your Total Super Balance was below $500,000 on the previous June 30.

Here's a practical example. Say your employer contributed $13,000 in SG each year from 2020-21 to 2024-25, and you made no additional concessional contributions. Your unused cap space from those years (assuming caps of $25,000 for 2020-21 and 2021-22, $27,500 for 2022-23 to 2024-25) would be approximately $12,000 + $12,000 + $14,500 + $14,500 + $14,500 = $67,500 in carry-forward amounts. Add the 2025-26 cap of $30,000, and you could potentially contribute up to $97,500 in concessional contributions this year.

At a marginal tax rate of 37% (plus 2% Medicare levy), the tax saving on an additional $67,500 in concessional contributions would be approximately $67,500 x (39% - 15%) = $16,200. That's a significant tax reduction in a single year.

How to check your carry-forward balance: Log into myGov, go to the ATO section, and navigate to "Super" then "Carry-forward concessional contributions". This shows your unused cap amounts for each prior year and your total available carry-forward balance. Alternatively, your super fund's online portal may show this information.

Critical warning: The carry-forward balance shown on myGov relies on accurate reporting by employers and super funds, which can sometimes lag by several months. Cross-reference with your actual super fund statements and payslips to verify the numbers before committing to a large contribution.

There are two ways to make additional concessional contributions: salary sacrifice (arranged through your employer) and personal deductible contributions (made directly to your fund, with a tax deduction claimed via a Notice of Intent). Both achieve the same tax outcome — the contribution is taxed at 15% inside super rather than your marginal rate — but the mechanics differ.

Salary sacrifice is set up through your employer's payroll. You nominate an amount per pay period to be redirected from your pre-tax salary into super. The benefit is that it's automatic and reduces your PAYG withholding in real time, so you see the tax benefit in every paycheck rather than waiting until tax return time. The downside is that it requires employer cooperation, takes time to set up, and is less flexible — changing the amount usually requires a new arrangement with payroll.

Personal deductible contributions give you more control. You make a lump-sum (or multiple) contribution directly to your super fund from your bank account, then lodge a "Notice of Intent to Claim a Deduction" with your fund before lodging your tax return (or before rolling over or withdrawing from the fund). The deduction is claimed on your tax return and reduces your taxable income for the year.

For EOFY planning with limited time, personal deductible contributions are often more practical. You can make a contribution in May or June, submit the Notice of Intent, and claim the deduction on your 2025-26 tax return. No need to coordinate with payroll.

Important timing note: The contribution must be received by your super fund before June 30, not just sent. BPAY payments can take 2-3 business days, and direct transfers can take longer. Allow at least a week of lead time. Many super funds explicitly warn that contributions received after June 30 will be allocated to the following financial year regardless of when they were initiated.

If your income plus concessional super contributions exceed $250,000 in a financial year, you'll face Division 293 tax — an additional 15% tax on the amount of concessional contributions above the $250,000 threshold (or on the total concessional contributions, whichever is less). This effectively doubles the tax on those contributions from 15% to 30%.

For example, if your income is $230,000 and you make $30,000 in concessional contributions (total $260,000), Division 293 applies to the $10,000 above the $250,000 threshold. The additional tax is $10,000 x 15% = $1,500. You can pay this from your own funds or have it deducted from your super balance.

Even with Division 293, concessional contributions are still tax-effective for high earners. The combined super tax rate of 30% is lower than the top marginal rate of 45% plus 2% Medicare levy (47%). On a $30,000 contribution subject to Division 293, you still save $30,000 x (47% - 30%) = $5,100 compared to receiving the income as salary.

The ATO issues Division 293 assessments after you lodge your tax return, typically several months later. The assessment includes the option to release the amount from your super fund. Most people choose to pay from super rather than from their personal funds, which is generally the pragmatic choice.

If you're near the $250,000 threshold, careful planning of the timing and amount of concessional contributions can minimise the Division 293 impact. A tax professional can model the optimal contribution level for your specific circumstances.

Super contributions are individual — each person has their own caps. This creates opportunities for couples to optimise their combined position. If one partner earns significantly more than the other, directing more of the household's super contributions toward the lower-income partner can be tax-effective.

Contribution splitting: You can split up to 85% of your concessional contributions from the previous financial year into your spouse's super account. This doesn't provide an immediate tax deduction, but it helps equalise super balances between partners, which can be beneficial for tax efficiency in retirement (two tax-free pensions of $1.9M each rather than one oversized balance).

Spouse contribution tax offset: If your spouse earns $40,000 or less, contributing $3,000 or more to their super gives you a tax offset of up to $540. The offset reduces at higher spouse incomes and cuts out entirely at $57,000. It's a modest benefit, but it's free and easy to access.

Co-contribution for the lower earner: If the lower-income partner earns between $43,445 and $58,445 and at least 10% from employment, a $1,000 non-concessional contribution triggers up to $500 in government co-contribution. Combined with the spouse contribution offset, a couple can access both benefits simultaneously — the higher earner gets the tax offset, and the lower earner gets the co-contribution on their own separate personal contribution.

For self-employed individuals, the rules are slightly different — you can claim a deduction for 100% of personal concessional contributions (no longer limited to those who earn less than 10% from employment). If you're a sole trader or contractor, personal deductible contributions are your primary tool for tax-effective super contributions.

Week 1 (now): Check your year-to-date super contributions. Log into myGov or your super fund portal and add up all employer SG payments, salary sacrifice, and any personal contributions made so far this financial year. Calculate your remaining concessional cap space ($30,000 minus year-to-date concessional contributions).

Week 2: Check your carry-forward balance on myGov. If you have unused caps from prior years and your Total Super Balance was below $500,000 on June 30 2025, you may be able to contribute well above $30,000. Cross-reference the ATO figures with your actual fund statements to verify accuracy.

By mid-April: Decide your strategy. If using salary sacrifice, contact your employer's payroll team to arrange additional contributions for the remaining pay periods before June 30. Calculate the per-pay-period amount needed to use your remaining cap space without exceeding it. If making personal deductible contributions, determine the lump-sum amount and prepare the transfer.

By late May: Make personal contributions via BPAY or direct transfer to your fund. Use the reference number provided by your fund for contributions — incorrect references can cause delays. Allow a minimum of 7-10 business days for the contribution to be received and processed.

By June 15: Confirm with your super fund that all contributions have been received and allocated to the 2025-26 financial year. Check the contribution type (concessional vs non-concessional) is correctly categorised.

After July 1: Submit your Notice of Intent to claim a deduction for any personal deductible contributions. Your fund must acknowledge the notice before you lodge your tax return. Keep a copy of the notice and the fund's acknowledgment for your records.

Final reminder: Exceeding the concessional cap results in the excess being included in your assessable income at your marginal rate plus an interest charge. Get the numbers right. If in doubt, contribute slightly below the cap rather than risk going over.