Super Contribution Caps Are Increasing: Here Is How to Make the Most of It

From 1 July 2026, the amount you are allowed to contribute to superannuation each year is going up. For many Australians, this is a genuine opportunity to put more money into one of the most tax-effective environments available.

What Is Changing From 1 July 2026

The before-tax (concessional) contributions cap, which includes your employer’s super guarantee payments, any salary sacrifice you make, and personal contributions you claim a tax deduction for, increases from $30,000 to $32,500 per year.

The after-tax (non-concessional) contributions cap, money you put into super from savings that have already been taxed, increases from $120,000 to $130,000 per year.

The bring-forward limit, which allows eligible people under age 75 to contribute up to three years’ worth of non-concessional contributions in a single year, increases from $360,000 to $390,000.

The general transfer balance cap, the maximum amount you can transfer into the tax-free retirement phase, increases from $2 million to $2.1 million from 1 July 2026.

Why These Changes Matter

Money contributed on a concessional basis is taxed at 15%, significantly lower than the marginal tax rates most working people pay. Money that grows inside super is also taxed at 15% during the accumulation phase, and at zero once the fund is in pension phase.

Getting more money into super sooner, and at the concessional tax rate, has a compounding effect over time. An additional $2,500 per year invested inside super at a long-term return of around 7% per annum could grow to approximately $37,000 over ten years, purely from the higher cap, before even accounting for the tax saving on the contribution itself.

What You Should Do Before 30 June 2026

There are some important things to address before the current financial year closes on 30 June. Some of these opportunities close permanently after that date.

• Unused concessional cap from 2020-21 expires permanently on 30 June 2026. If you have unused carry-forward concessional contributions from 2020-21 and your total super balance is below $500,000, this is the last year you can use them. After 30 June, they are gone
• If you are considering triggering the bring-forward rule, think carefully about timing. Triggering the bring-forward before 30 June means you lock in at the current $360,000 limit. Waiting until after 1 July gives you access to the higher $390,000 limit – if you have not already triggered the rule
• Make sure any contributions intended for 2025-26 are received by your super fund by 30 June. The date your fund receives the contribution is what counts, not when you send it.
  

What You Can Do From 1 July 2026

From 1 July, the new caps apply automatically. Key actions to consider include:

• Review your salary sacrifice arrangement — if you have one set up, you may want to increase it to take advantage of the higher concessional cap
• If you have been making personal after-tax contributions, you can now contribute up to $130,000 per year without incurring excess contributions tax
• If you are eligible for the bring-forward rule and have not triggered it, you now have the option to contribute up to $390,000 in a single year
• If your total super balance was below $500,000 at 30 June 2026, you may also be able to catch up unused concessional contributions from previous years – this can be a powerful strategy for people who have had career breaks or periods of lower income

A Note on the $3 Million Super Tax

From 1 July 2026, Division 296, the additional tax on superannuation balances above $3 million also commences. For those with balances approaching or above that threshold, the interaction between the new contribution caps, the transfer balance cap increase, and the Division 296 tax requires careful planning. Getting advice on your specific position before making further contributions is strongly recommended.

It Is Also Worth Looking at Your Broader Super Strategy

With Payday Super also commencing from 1 July 2026, requiring super to be paid with every pay run rather than quarterly, employees will begin receiving their employer contributions more frequently, meaning those contributions start compounding sooner. Combined with the higher caps, this creates a useful moment to revisit your overall super strategy and ensure everything is working as effectively as possible.

Superannuation is one of the most valuable financial tools available to Australians, but only if it is being actively managed. If you would like to understand how the new contribution caps apply to your situation and how to make the most of them, we are here to help. Call 1800 618 800 or email admin@simmonslivingstone.com.au.