Super Contribution Caps 2026 — What Has Changed?

Reviewed August 2026 — cap figures current for the 2026-27 financial year.

Concessional Contributions Cap Increase

From 1 July 2026, the annual concessional contributions cap rose to $32,500, indexed in line with average weekly ordinary time earnings (AWOTE). Concessional contributions include employer Super Guarantee contributions, salary sacrifice arrangements, and personal contributions claimed as a tax deduction. For the 2025-26 financial year the cap was $30,000, so the increase of $2,500 provides additional room for before-tax contributions.

If you have a total superannuation balance below $500,000 at the previous 30 June, you may also be eligible to use unused concessional cap amounts from prior years under the carry-forward rules. Unused amounts from 2020-21 or earlier expire after 30 June 2026, so the 2025-26 year was the last opportunity to use those older carry-forward amounts. The maximum concessional contribution available under the carry-forward rules in 2026-27 could be up to $175,000 for eligible individuals.

Non-Concessional Contributions Cap and Bring-Forward Rules

The non-concessional contributions cap increased to $130,000 from 1 July 2026, calculated as four times the concessional cap. The three-year bring-forward limit also increased to $390,000, up from $360,000. Non-concessional contributions are after-tax contributions that are not claimed as a tax deduction, and they can be made up to age 75.

Eligibility to make non-concessional contributions depends on your total superannuation balance (TSB). If your TSB was $2.1 million or more on 30 June 2026, you cannot make non-concessional contributions in 2026-27. Lower TSB thresholds determine whether you can use the two-year ($260,000) or three-year ($390,000) bring-forward arrangement. The general transfer balance cap also increased to $2.1 million from 1 July 2026.

How the Changes Affect Your Strategy

The increase in contribution caps means more room to build retirement savings within the tax-advantaged super environment. Concessional contributions are taxed at up to 15% (or 30% for high-income earners under Division 293), compared to marginal tax rates that can reach 45%. Non-concessional contributions are not taxed on entry but earnings within super are concessionally taxed.

If you are approaching preservation age or planning retirement, the higher caps and transfer balance cap increase may affect your contribution timing. Individuals with TSB between $2 million and $2.1 million on 30 June 2026 may now be eligible to make non-concessional contributions where they were previously restricted. Consider whether triggering the bring-forward rule in 2026-27 or waiting for future indexation aligns with your broader retirement plan.

Division 293 Tax and Contribution Planning

High-income earners need to consider Division 293 tax when making concessional contributions. Division 293 applies an additional 15% tax on concessional contributions for individuals whose income and concessional contributions exceed $250,000. This means the effective tax rate on contributions reaches 30%. With the cap increasing to $32,500, the total Division 293 tax on the maximum concessional contribution could be up to $4,875 for affected individuals.

Strategies to manage Division 293 include: timing contributions across financial years to stay below the threshold, using non-concessional contributions instead where possible, or accepting the additional tax knowing super still provides concessional earnings treatment. Your adviser should model different scenarios to determine the most tax-effective approach for your circumstances. The increase in the transfer balance cap to $2.1 million also provides more room for tax-free pension phase accounts.

Frequently Asked Questions

Can I still use carry-forward concessional contributions from previous years?
Yes, if your total super balance was below $500,000 on 30 June 2026. Unused amounts from 2021-22 onwards remain available. Note that unused amounts from 2020-21 and earlier expired on 30 June 2026.

Do the new caps apply to everyone?
Yes, the caps apply to all individuals regardless of age, subject to the work test for those aged 67 to 75 making concessional contributions. Non-concessional contributions can be made up to age 75 regardless of work status.

What happens if I exceed the contribution cap?
Excess concessional contributions are included in your assessable income and taxed at your marginal rate, plus an excess concessional contributions charge. Excess non-concessional contributions may be subject to penalty tax at 45% unless you elect to release them.

How does the transfer balance cap increase affect me?
The general transfer balance cap increased to $2.1 million from 1 July 2026. This cap limits the total amount you can transfer from accumulation to retirement-phase income streams. Individuals with existing transfer balance accounts should check whether they have unused cap space.

Comparing Caps Across Financial Years

Understanding how the caps have changed helps put the 2026 increases in context. The concessional cap was $25,000 from 2017-18 to 2020-21, then indexed to $27,500 in 2021-22, $30,000 from 2023-24 to 2025-26, and now $32,500 from 2026-27. Non-concessional caps have tracked at four times the concessional cap: $100,000, then $110,000, $120,000, and now $130,000. The bring-forward limit has moved from $300,000 to $390,000 over the same period. This trajectory suggests ongoing indexation will continue to increase caps incrementally each year as AWOTE grows.

For strategic planning, the key question is whether to use caps each year or to accumulate unused amounts under the carry-forward rules. An individual with a $500,000 balance who has not made concessional contributions for five years could contribute up to $162,500 in a single year (five years of unused $32,500 caps). This can be a powerful catch-up strategy for those with irregular income or who have taken career breaks. However, the tax benefit must be weighed against the opportunity cost of locking funds away until preservation age.

Coordination with Other Super Strategies

The cap increases should be considered alongside other super planning opportunities. The downsizer contribution of up to $300,000 per person from selling a home (age 55 and over) can be layered on top of normal cap-based contributions without affecting your non-concessional cap. Similarly, the government co-contribution scheme (matching personal after-tax contributions for low-to-middle income earners up to $500) and the low-income super tax offset (LISTO, refunding up to $500 of concessional contributions tax for low earners) remain available alongside the increased caps.

If you are eligible for the carry-forward rule and also considering downsizer contributions, the optimal order is generally: maximise concessional contributions first (through salary sacrifice or personal deductible contributions), then use downsizer contributions (which do not count toward any cap), and finally consider non-concessional contributions up to the bring-forward limit. Your Statement of Advice should model these interactions and show the projected retirement benefit of each component of the strategy.