Super Contribution Caps 2026-27: New Limits from 1 July

From 1 July 2026, both concessional and non-concessional super contribution caps are increasing. The concessional (before-tax) contribution cap rises from $30,000 to $32,500 per year.

The short version: This cap covers employer Superannuation Guarantee (SG) contributions, salary sacrifice contributions, and personal deductible contributions. The non-concessional (after-tax) contribution cap rises from $120,000 to $130,000 per year. This cap covers personal contributions where you don't claim a tax deduction.

The bring-forward rule (for those under 75 with a total super balance under $1.66 million at 30 June of the prior year) allows you to contribute up to three years of non-concessional caps in a single year — rising from $360,000 to $390,000. These increases are driven by indexation linked to Average Weekly Ordinary Time Earnings (AWOTE). The caps are rounded down to the nearest $2,500 increment, which is why the concessional cap moves from $30,000 to $32,500 rather than a smaller increment.

The last increase was on 1 July 2024 when caps went from $27,500 to $30,000 (concessional) and $110,000 to $120,000 (non-concessional).

The $32,500 concessional cap is a combined limit covering all before-tax contributions. Your employer's Superannuation Guarantee (SG) counts first — at 12.5% SG on a $100,000 salary, that's $12,500 of your $32,500 cap used by your employer's mandatory contribution.

You've $20,000 of cap space remaining for salary sacrifice or personal deductible contributions. Concessional contributions are taxed at 15% inside your super fund, compared to your marginal tax rate outside super. For someone on a $100,000 salary (30% marginal rate + 2% Medicare levy), contributing an additional $20,000 via salary sacrifice saves $20,000 x (32% - 15%) = $3,400 in tax per year.

Real talk — The trade-off is that the money is locked inside super until you reach preservation age (currently 60). If you exceed the $32,500 cap, the excess is included in your assessable income and taxed at your marginal rate, plus you may receive a charge for the excess. You can choose to release the excess from your super fund to pay the additional tax, or leave it in super and wear the charge.

It's critical to track your contributions carefully, especially if you change jobs mid-year and have SG contributions from multiple employers.

If you've not fully used your concessional cap in previous years, you can carry forward the unused amounts and contribute them in a later year. This is called catch-up contributions and is available if your total super balance was below $500,000 on 30 June of the previous financial year.

Unused amounts can be carried forward for up to five years. For example, if you had $30,000 concessional caps in 2023-24, 2024-25, and 2025-26, but only contributed $20,000 per year (through SG alone), you've $30,000 in accumulated unused cap space. In 2026-27, you could contribute up to $32,500 (the new cap) plus $30,000 (carried forward) = $62,500 in total concessional contributions.

At a 30% marginal rate, making a $62,500 concessional contribution (above your SG) would save approximately $10,625 in tax — a substantial benefit. Catch-up contributions are particularly valuable for people who have had career breaks, part-time work periods, or periods of low income where their SG contributions were well below the cap. It's also useful for self-employed people who may have had lean years and want to make larger contributions in profitable years.

One thing people miss: Check your unused carry-forward amounts on MyGov via the ATO's online services — they're listed under your super account summary.

Non-concessional contributions are after-tax contributions — money you contribute from your savings that has already been taxed. You don't receive a tax deduction, but the money enters the super environment where earnings are taxed at 15% (or 0% in retirement phase) rather than your marginal rate.

The standard non-concessional cap is $130,000 per year from 1 July 2026. The bring-forward rule allows you to contribute up to three years of caps in a single year: $130,000 x 3 = $390,000. This is commonly used when receiving an inheritance, selling a property, or otherwise having a large lump sum to invest.

To trigger the bring-forward rule, you must be under 75 years of age and have a total super balance below $1.66 million at 30 June of the prior year. The available bring-forward amount reduces as your total super balance approaches $1.9 million: balance under $1.66M = $390,000 over 3 years; balance $1.66M to $1.79M = $260,000 over 2 years; balance $1.79M to $1.9M = $130,000 (no bring-forward). Balance above $1.9M = $0 (no non-concessional contributions allowed).

If you exceed the non-concessional cap, you face a choice: withdraw the excess and the associated earnings (earnings are taxed at your marginal rate), or leave it in super and pay 47% tax on the excess. Always get the numbers right before making large non-concessional contributions.

Heads up — Division 293 imposes an additional 15% tax on concessional super contributions for individuals with income plus concessional contributions exceeding $250,000. This effectively doubles the tax on super contributions from 15% to 30% for high earners.

The $250,000 threshold has not been indexed since its introduction and is not changing in 2026-27. With the concessional cap rising to $32,500, a person earning $230,000 in salary who salary sacrifices the full cap would have combined income plus contributions of approximately $262,500, triggering Division 293 on $12,500 of contributions (the amount over $250,000). The additional tax is $12,500 x 15% = $1,875.

Even with Division 293, the tax rate on super contributions (30%) is still lower than the 45% marginal rate plus 2% Medicare levy that would apply if the money were taken as salary. The net benefit of salary sacrificing into super for someone on the top marginal rate is reduced from 32 cents per dollar (47% - 15%) to 17 cents per dollar (47% - 30%), but it's still a significant benefit. The ATO issues a Division 293 assessment after you lodge your tax return.

You can pay the tax from your own funds or direct your super fund to release the amount. Most people choose to have their super fund pay it, which reduces their super balance but avoids an out-of-pocket payment. Keep that in mind.

The total superannuation balance (TSB) and transfer balance cap (TBC) interact with contribution caps in important ways. The general transfer balance cap — the maximum amount you can move into the tax-free retirement phase (pension phase) — is $1.9 million from 1 July 2023 and is not changing in 2026-27.

This bit matters. Your personal transfer balance cap may be lower if you've previously started a retirement phase pension. The total super balance cap that restricts non-concessional contributions is also $1.9 million. If your total super balance exceeds $1.9 million at 30 June, you can't make any non-concessional contributions in the following financial year.

You can still make concessional contributions (up to the $32,500 cap) regardless of your balance. For couples, the strategy is different. If one partner has a balance above $1.9 million and the other has a lower balance, the lower-balance partner can still receive non-concessional contributions.

Contribution splitting allows you to split up to 85% of concessional contributions from the higher-balance partner to the lower-balance partner, helping to equalise balances and maximise the total amount in the tax-free retirement phase. Couples with combined super of $3.8 million or more can each have up to $1.9 million in retirement phase, with all earnings tax-free — a powerful incentive to build super balances for both partners.

With the caps increasing on 1 July 2026, the window between now and 30 June 2026 is important for strategic decision-making. Strategy 1 — maximise your current concessional cap.

You've until 30 June 2026 to use the current $30,000 concessional cap. If your SG contributions for 2025-26 will total $12,500, you've $17,500 of cap space remaining. A personal deductible contribution of $17,500 before 30 June saves $17,500 x 17% (for a 32% marginal rate taxpayer) = $2,975 in tax.

Don't skip this part. Strategy 2 — use catch-up concessional contributions before 30 June 2026 if your total super balance is under $500,000. Check your unused carry-forward balance on MyGov and consider making a lump sum personal deductible contribution before 30 June. Strategy 3 — consider timing non-concessional contributions.

If you've a large amount to contribute, waiting until 1 July 2026 gives you access to the higher $130,000 annual cap or $390,000 bring-forward. Strategy 4 — review salary sacrifice arrangements with your employer.

If you want to maximise the new $32,500 cap from 1 July, you need to set up or increase salary sacrifice before the new financial year starts. Strategy 5 — check your total super balance on 30 June 2026, as this determines your non-concessional cap and bring-forward eligibility for 2026-27. A balance above $1.9M locks you out of non-concessional contributions entirely.