New Super Contribution Caps for 2026-27
The super contribution caps are increasing from 1 July 2026, creating extra opportunities for people looking to build retirement savings in a tax-effective way.
The concessional contributions cap will rise from $30,000 to $32,500, while the non-concessional cap will increase from $120,000 to $130,000. The maximum three-year bring-forward amount will also increase to $390,000.
Concessional Contribution Cap
Concessional contributions are before-tax contributions, including employer super guarantee, salary sacrifice and personal deductible contributions. These are generally taxed at 15% in the fund, although Division 293 can apply an extra 15% tax for higher income earners where income plus concessional contributions exceed $250,000.
For higher income earners already using the full concessional cap, the increase provides extra room to contribute more to super in a tax-effective way. It may also help employees who are salary sacrificing close to the current cap and want to increase contributions from next financial year.
The higher concessional cap may also improve the value of catch-up contributions. If your total super balance is below $500,000, you may be able to use unused concessional cap amounts from the previous five years. This can create a valuable opportunity to contribute more in 2026-27, particularly if you have irregular income or a large capital gain.
Non-Concessional Contribution Cap
Non-concessional contributions are after-tax amounts made from savings or take-home pay and are not taxed on entry to super.
The increase in the non-concessional cap opens up larger contribution opportunities. For example, a person may be able to contribute $120,000 before 30 June 2026, then potentially contribute up to $390,000 under the bring-forward rules from 1 July 2026, subject to eligibility. For couples, this can double the super contribution opportunity.
These changes may be particularly relevant for people approaching retirement, receiving an inheritance, or selling an asset and looking to contribute more to super.
Consider Reviewing Your Strategy
The cap increases may create new planning opportunities, particularly for those building super in the lead-up to retirement. They may also be relevant for anyone reviewing contribution timing or pension commencement strategies ahead of the transfer balance cap increasing to $2.1 million from 1 July 2026.
This is a good time to review the timing and rules that may apply in your situation. Before making recommendations, we carefully review your contribution history to help ensure any strategy stays within the relevant limits.
Lachlan Harvey CFP®
Authorised Representative (No 227293)
