Superannuation contribution caps were indexed from 1 July 2026, and the increases are meaningful enough to be worth revisiting your contribution strategy rather than simply carrying last year’s arrangements forward.
The new caps
| Cap type | 2025-26 | 2026-27 |
|---|---|---|
| Concessional | $30,000 | $32,500 |
| Non-concessional | $120,000 | $130,000 |
| Bring forward | $360,000 | $390,000 |
| Transfer balance cap | $2.0m | $2.1m |
Why this matters
Higher contribution caps create more room to build retirement savings in a tax effective environment. Concessional contributions are generally taxed at 15% within the fund, which for most working Australians is well below their marginal rate. An extra $2,500 of concessional headroom is not transformative on its own, but it compounds, and it is available every year.
The non-concessional increase to $130,000, and the bring forward increase to $390,000, matter more for anyone planning a larger contribution around a property sale, an inheritance, a business sale or the wind down years before retirement.
The transfer balance cap increase to $2.1 million affects how much can be moved into the tax free retirement phase.
Planning opportunities
Increase salary sacrifice contributions. If your salary sacrifice arrangement was set to the old $30,000 cap, it is now leaving $2,500 of concessional space unused each year. Adjusting the arrangement takes one conversation with your payroll team.
Make additional tax deductible personal contributions. For business owners and anyone with variable income, a personal deductible contribution before 30 June can be a more flexible way to use the concessional cap than a fixed salary sacrifice arrangement.
Use the bring forward rules for larger after tax contributions. Eligible individuals under 75 may be able to bring forward up to three years of non-concessional contributions, now up to $390,000. Eligibility depends on your total super balance, so this needs checking before the money moves.
Check your carry forward concessional contributions. If your total super balance was under the threshold and you have not used your full concessional cap in earlier years, you may be able to use those unused amounts. This is one of the most under used provisions in the system, particularly for people with a year of unusually high income.
Key actions for the year ahead
Now, and through the year:
- Review your contribution strategy against the new caps
- Adjust salary sacrifice arrangements that are still set to last year’s figures
- Check your total super balance, since it drives eligibility for several strategies
- Align contributions with your long term retirement goals rather than year by year
Before 30 June 2027:
- Confirm you have used the available caps if that is your intention
- Consider bring forward strategies where a larger contribution is planned
- Make sure any personal deductible contributions are received by the fund in time and that a valid notice of intent has been lodged
Timing is worth watching carefully. A contribution counts in the year the fund receives it, not the year you send it, and the last week of June is not the time to discover a processing delay.
Frequently asked questions
What happens if I exceed the concessional cap? The excess is included in your assessable income and taxed at your marginal rate, with an offset for the 15% tax already paid by the fund. An interest charge may also apply. It is recoverable, but it creates paperwork nobody enjoys.
Can I still use unused concessional cap amounts from previous years? If your total super balance was below the relevant threshold at the prior 30 June, you may be able to carry forward unused concessional cap amounts from the previous five years. This is worth checking before a high income year.
Do the higher caps change the Division 293 threshold? Division 293 tax applies an additional 15% to concessional contributions for higher income earners. It operates separately from the caps, and it is worth factoring into the decision if your income is near the threshold.
Is more always better? No. Super is a tax effective environment but it is also a preserved one, meaning you generally cannot access it until you meet a condition of release. Contribution strategy needs to sit alongside your cash flow needs and any shorter term plans.
What about the proposed tax on large balances? The proposed Division 296 measure, targeting balances above $3 million with tiered rates, has been deferred to 1 July 2026 and remains an area to watch. If your balance is approaching that level, it is worth a conversation.
Review your contribution strategy
The caps changed, but strategies often do not. If you would like us to review your contribution arrangements, check your eligibility for bring forward or carry forward contributions, or model what the new caps allow across your structure, we would be glad to help.
Call us on +61 417 733 869 or get in touch to arrange a review.
This article is general information only and does not constitute financial or taxation advice. It does not take your objectives, financial situation or needs into account. Please contact us for personalised advice.