Contribution cap increases: Issues to consider

The annual superannuation contribution limits, referred to as ‘contribution caps’, are set to increase from 1 July 2026. As these caps are indexed in line with average weekly ordinary time earnings (AWOTE), from 1 July 2026, we’ll see an increase in both the concessional and non-concessional contribution caps as follows:

It’s important that you consider how these changes will affect your personal position and what they mean for you in the current financial year and beyond.

To get the best outcome, before making additional contributions this financial year, you should review considerations, including your age, total super balance and taxable income.

Your age

Knowing how many more years you have remaining to contribute to your super fund is extremely important. This will be determined by the age-based rules that apply to contributions and your age in the year you are looking to make the relevant contributions.

Non-concessional contributions can be made up to age 75.

Bring forward (three-year rule): If you’re under age 75 at any time in a financial year, you can contribute up to three times the annual general non-concessional cap in that financial year.

If you are approaching age 75, then you may need to make any proposed non-concessional contribution before you turn 75.

Concessional contributions can be made up to age 67, even if you are not working, or until age 75, where you meet the work test requirements.

If you’re approaching age 67 and not working, then you may need to consider making any concessional contributions sooner rather than later. If these concessional contributions are made before 30 June, the cap will be $30,000.

Also, if you are approaching age 75, then you may need to consider making any concessional contributions while allowed. If this is done before 30 June 2026, then keep in mind that it’s the current (lower) contribution cap that will apply. Concessional contributions made after 1 July 2026 would be subject to the higher $32,500 cap.

Total super balance

Your total super balance (TSB) affects your ability to make use of certain contribution strategies, so be sure to check it.

Your TSB on 30 June 2025 affects the contribution strategies you can use this financial year, from 1 July 2025 to 30 June 2026.

Non-concessional contributions: If your TSB was below $2 million on 30 June 2025, then you may be eligible to make non-concessional contributions.

Non-concessional contributions made during the current financial year are capped at $120,000. This cap increases to $130,000 per year from 1 July 2026.

So, if your TSB is approaching $2 million, you may want to consider making a non-concessional contribution while you can.

That is, if your total super balance as at 30 June 2026 is going to be over $2 million, then the current financial year is the last year you can make non-concessional contributions.

Bring forward (three-year rule): If you have already triggered your three-year non-concessional bring forward period in the last two years, then you are not eligible to access the increase in the non-concessional cap until that current three-year period ends.

Your three-year limit is determined in the year you first triggered the bring-forward rules.

If you’re eligible to use the three-year bring-forward rules for non-concessional contributions, you will need to decide if you trigger this in the current financial year when the annual cap is $120,000, therefore allowing up to $360,000 to be contributed under the bring-forward rule, or wait until 1 July 2026 when the annual cap increases to $130,000 allowing up to $390,000 in non-concessional contributions.

You would need to consider:

• Your age and how long you have to contribute
• How many lots of three-year periods you have access to
• Your TSB and whether you will be eligible to make further non-concessional contributions over time.

One strategy to consider for those with the capacity to make a large non-concessional contribution and meet the age and TSB requirements is to make a concessional contribution of $120,000 in 2025–26 and use the bring-forward arrangement to contribute $390,000 in 2026–27.

Interaction between your TSB and your non-concessional contribution cap

Below is a table that sets out the TSB limits around non-concessional contributions (NCC) using the bring-forward rule for both the current 2025–26 financial year and the 2026–27 financial year.

Concessional contributions: Your TSB balance doesn’t affect the level of concessional contributions that can be made by you, or for you, each year.

However, if you are looking to make a current year (2026) concessional contribution by using any or all of your unused ‘carry-forward’ concessional amounts, then your TSB on 30 June 2025 must have been below $500,000.

If your TSB was below $500,000 on 30 June 2025 but is likely to be above that level on 30 June 2026, you may want to consider making a larger concessional contribution this year, while allowed.

Taxable income 2026 and 2027

If you anticipate a significant change in your taxable income next financial year, then you should take this into consideration.

For instance, if your taxable income is going to be significantly lower next year, then it may be worth making use of any unused, carry-forward concessional contributions that you may have access to in the current 2026 financial year.

Making use of these unused amounts this year by making a larger concessional contribution could result in a better overall tax outcome.

Alternatively, if your taxable income is going to be significantly higher next financial year, for instance, where a capital gains tax event may occur, then delaying larger concessional contributions until next year could provide a better outcome.

Don’t forget to review your ‘likely’ TSB at 30 June this year, keeping in mind that you can only make a larger concessional contribution using your unused amounts if your TSB is below $500,000 at the prior 30 June.

Other strategies to consider

Spouse contributions or re-contribution strategy: If you’re thinking about making large, non-concessional contributions, it could be worth thinking about who that contribution should be made for: you, or your spouse.

Where possible, relatively equal spouse super balances can prove beneficial. For instance, it would not make sense to have one spouse’s super balance well above the $2 million transfer balance cap and the other spouse’s balance well below this level.

If you are in this position, consider making the non-concessional contribution for the spouse with the lower balance.

Review existing salary-sacrifice agreements: If you have a salary-sacrifice agreement with your employer, you should make sure that the current arrangement is still suitable.

To be effective, this agreement would need to be in place by 1 July 2026, so don’t leave this to the last minute!

Other contribution considerations

Division 296 tax

With the new Div 296 tax starting from 1 July 2026, it would be prudent to consider whether making further large contributions to super is in your best interest, especially for those fund members with balances approaching the $3 million threshold above which Div 296 applies.

Payday Super

When you’re planning for any salary-sacrifice arrangement for the 2027 financial year, it’s important to keep in mind the 1 July 2026 changes to the super guarantee (SG), with the introduction of Payday Super.

Under the new rules, from 1 July 2026, employers must pay compulsory super contributions for their staff at the same time as their wages. To meet these new rules, employers need to make sure that all relevant contributions are received by the super fund within seven days of the employee’s payday. This is different from the current rules, where SG contributions need to be made on a quarterly basis.

For some, these changes could result in excess concessional contributions being made for the 2027 financial year, due to the final quarter’s SG contributions for the 2026 financial year not being made until July 2027. If you add these contributions to more frequent SG contributions under the Payday Super rules, there will be some workers whose total annual concessional contributions will exceed the annual concessional cap.