Super Contribution Caps Rising July 2026: What It Means for Your Retirement

20 March 2026|7 min read

From July 1, 2026, the concessional super cap rises to $32,500 and the non-concessional cap to $130,000. Here's what's changing, the new transfer balance cap, and strategies to maximise your retirement savings before and after the increase.

New super contribution caps from July 1, 2026

The Australian Government has confirmed that superannuation contribution caps will increase from 1 July 2026, following indexation in line with Average Weekly Ordinary Time Earnings (AWOTE). The concessional (before-tax) contribution cap rises from $30,000 to $32,500 per financial year. The non-concessional (after-tax) contribution cap rises from $120,000 to $130,000 per financial year. The bring-forward rule for non-concessional contributions increases from $360,000 to $390,000 over a three-year window. The transfer balance cap — the maximum amount that can be transferred into a tax-free retirement phase pension account — increases from $1.9 million to $2.0 million. These changes apply to contributions made on or after 1 July 2026 for the 2026-27 financial year. The SG rate remains at 12%, unchanged from 2025-26, as 12% was the final scheduled increase under existing legislation.

Concessional cap: $30,000 to $32,500 — what it means in practice

The concessional contribution cap covers all before-tax super contributions, including your employer's SG contributions, salary sacrifice amounts, and any personal contributions you claim a tax deduction for. At $32,500 for 2026-27, this gives you more room to top up your super with tax-effective contributions. For someone earning $100,000, their employer contributes $12,000 in SG (at 12%), leaving $20,500 of concessional cap headroom — up from $18,000 under the current $30,000 cap. That extra $2,500 in headroom means you could salary sacrifice an additional $2,500 before tax, saving approximately $825 in tax if you are in the 37% marginal bracket (since super contributions are taxed at 15%, saving you 22 cents per dollar). For someone earning $150,000, employer SG is $18,000, leaving $14,500 in headroom. At $200,000, SG is $24,000 and headroom is $8,500. Higher earners above the Division 293 threshold ($250,000 in combined income and super contributions) pay an additional 15% tax on concessional contributions, bringing the effective super tax rate to 30% — still lower than the 45% marginal rate, but the tax advantage is smaller.

Non-concessional cap: $120,000 to $130,000 and the bring-forward rule

Non-concessional contributions are made from after-tax money and are not taxed going into super. The annual cap rises from $120,000 to $130,000. More significantly, the bring-forward rule — which allows you to contribute up to three years' worth of non-concessional contributions in a single year — increases from $360,000 to $390,000. This is particularly useful if you receive a lump sum (inheritance, property sale, bonus) and want to get a large amount into the super system quickly. To use the bring-forward rule, you must be under 75 years old at any time in the financial year you trigger it. Your total super balance must be below $1.66 million (indexed) on 30 June of the prior financial year to access the full three-year bring-forward. If your balance is between $1.66 million and $1.79 million, you can only bring forward two years ($260,000). If your balance is above $1.79 million, you cannot make any non-concessional contributions. These thresholds will also be re-indexed for 2026-27 — check the ATO website after July 1 for updated figures. Non-concessional contributions are a powerful wealth-building tool because the earnings on those contributions inside super are taxed at a maximum of 15% (or 0% in pension phase), compared to your marginal tax rate outside super.

Transfer balance cap: $1.9M to $2.0M

The general transfer balance cap (TBC) increases from $1.9 million to $2.0 million from 1 July 2026. This is the maximum amount you can transfer from the accumulation phase (where earnings are taxed at 15%) into the retirement phase (where earnings are tax-free) over your lifetime. The TBC is a lifetime cap, not an annual cap — once you use a portion of it, that portion is used permanently, even if your pension balance subsequently decreases. Your personal transfer balance cap depends on when you first started a retirement phase pension. If you have never been in pension phase, your personal TBC will be the general TBC that applies when you first commence a pension. If you started a pension when the cap was $1.6 million and used the full amount, your personal TBC is $1.6 million and does not increase to $2.0 million. If you used only a portion of a previous cap, your unused percentage is applied to any increase. For example, if you started a pension of $800,000 when the cap was $1.6 million (using 50%), your proportional increase means your personal TBC is now 50% of $2.0 million = $1.0 million remaining. This is complex and it is worth getting specific advice from your super fund or a financial adviser.

Strategy: should you max out contributions before or after July 1?

Timing your contributions around the July 1 changeover can make a meaningful difference. For concessional contributions, the higher cap only applies to contributions made on or after July 1, 2026. If you have already used your full $30,000 cap for 2025-26, you cannot contribute more until the new financial year starts. If you have not yet maxed out your 2025-26 concessional cap, do so before June 30 to take full advantage of both years — $30,000 in 2025-26 plus $32,500 in 2026-27, totalling $62,500 over 12 months if you time it right. For non-concessional contributions, timing is critical if you plan to use the bring-forward rule. If you trigger the bring-forward in 2025-26 (before July 1), the cap is $360,000 over three years at $120,000 per year. If you wait and trigger it in 2026-27 (after July 1), the cap is $390,000 over three years at $130,000 per year — an extra $30,000 you can get into super. If you have a large lump sum to contribute, waiting until after July 1 to trigger the bring-forward is the better strategy. However, if you have already triggered a bring-forward period in a prior year, you cannot restart it until the current period expires.

Carry-forward unused concessional contributions

If your total super balance was below $500,000 on 30 June 2025, you can carry forward unused concessional cap amounts from the previous five financial years and use them in a later year. This is a powerful catch-up mechanism for people who have not been maximising their concessional contributions. For example, if you only contributed $20,000 in concessional contributions in each of the last three years (against a cap of $27,500 in 2023-24 and $30,000 in 2024-25 and 2025-26), you have accumulated unused cap amounts of $7,500 + $10,000 + $10,000 = $27,500. In 2026-27, you could contribute up to $32,500 (the new cap) plus $27,500 in carry-forward amounts, for a total of $60,000 in concessional contributions — all taxed at the concessional 15% rate. This is particularly valuable for people returning to work after career breaks, those who recently received a pay rise, or self-employed individuals who had lean years. The carry-forward is available for amounts unused from 2018-19 onwards, and you do not need to apply for it — it is calculated automatically by the ATO based on your contribution history. Check your available carry-forward amount through your myGov account linked to the ATO.

Division 293: the extra tax for high earners

Division 293 imposes an additional 15% tax on concessional super contributions for individuals whose combined income and concessional super contributions exceed $250,000. This brings the total tax on those contributions to 30% — still below the top marginal rate of 45% plus the 2% Medicare levy, so there is still a tax benefit to contributing to super even if Division 293 applies. The $250,000 threshold is not indexed and has remained unchanged since 2017. It is based on your combined income, which includes taxable income, reportable fringe benefits, total net investment losses, and concessional super contributions. If your combined income is $240,000 and you make $32,500 in concessional contributions, only $22,500 of those contributions (the amount that pushes you above $250,000) will attract the additional 15% tax — not the full $32,500. The ATO issues Division 293 assessments after you lodge your tax return, and you can choose to pay the tax from your super fund or from your personal funds. If you are approaching the $250,000 threshold, it may be worth modelling the trade-off between additional salary sacrifice and the Division 293 tax to determine the optimal contribution level for your situation.