Superannuation legislation often evolves incrementally, but certain years bring changes significant enough to warrant closer attention. The financial year commencing 1 July 2026 is one of those moments.
Increases to contribution limits, adjustments to balance thresholds, the introduction of payday super and changes to contribution timing will all influence how and when money moves into superannuation, how balances are assessed, and how retirement phase strategies unfold.
For individuals with higher incomes, complex remuneration structures or long‑term wealth accumulation plans, these changes introduce both opportunity and risk. The rules themselves are not complex in isolation. The challenge lies in how they interact.
This article outlines the key superannuation changes applying from 1 July 2026 and explains why reviewing strategy ahead of the new financial year can make a material difference to outcomes.
Contribution Limits Are Set to Increase
From 1 July 2026, both concessional and non‑concessional contribution caps are set to rise¹. These increases expand the amount that can be directed into the concessionally taxed superannuation environment, either through deductible contributions or after‑tax funding, which is generally taxed at lower rates than personal income.
How Contribution Caps Will Change
| Super measure | 2025–26 | 2026–27 |
| Concessional contributions cap | $30,000 | $32,500 |
| Non‑concessional contributions cap | $120,000 | $130,000 |
In practical terms, higher caps may allow:
- Greater personal deductible contributions to reduce assessable income
- Larger after‑tax contributions for long‑term wealth accumulation
- Improved flexibility when aligning super contributions with cash flow events
While higher caps create additional capacity, they also increase the importance of monitoring contribution timing, eligibility and balance‑based thresholds.
Unused Concessional Contributions and Catch‑Up Opportunities
Annual contribution caps are only part of the superannuation picture. Individuals with a Total Super Balance (TSB) below $500,000 at the prior 30 June may also be able to access unused concessional contribution capacity from the previous five financial years.
As the annual concessional cap increases, the maximum amount available under the carry‑forward rules also rises. This can create substantial one‑off contribution opportunities for those with variable income, recent liquidity events or surplus cash.
Importantly, unused concessional amounts from the 2020–21 financial year expire on 30 June 2026. Any entitlement not used by that date is permanently lost. For those with the capacity to contribute additional funds, the period leading up to 30 June 2026 represents a critical opportunity to review whether a catch-up contribution is available and appropriate.
Carry‑Forward Concessional Contribution Limits:
| Measure | 2025–26 | 2026–27 |
| Maximum five‑year carry‑forward | $137,500 | $142,500 |
| Carry‑forward plus current year cap | $167,500 | $175,000 |
Non‑Concessional Contributions and Balance‑Based Eligibility
Eligibility to make after‑tax contributions is determined by your Total Super Balance (TSB) on 30 June of the prior financial year. This balance assessment governs whether non-concessional contributions can be made at all and whether the bring forward rule can be accessed.
From 1 July 2026, the TSB thresholds that apply to non‑concessional contributions will increase in line with indexation. As a result, some individuals who were previously restricted may again become eligible to contribute, even where their super balance remains unchanged, provided it falls below the higher thresholds.
It is important to note that eligibility is assessed at a fixed point in time. Your balance when a contribution is made during the year is not relevant. What matters is the recorded balance at the prior 30 June. This creates planning opportunities where balances are close to threshold levels and contribution sequencing is managed carefully.
Bring-Forward Rules and TSB Thresholds:
| Maximum non‑concessional contribution | 2025–26 Total super balance test | 2026–27 Total super balance test |
| Nil | $2.0m or more | $2.1m or more |
| Standard annual cap | $1.88m to under $2.0m ($120,000) | $1.97m to under $2.1m ($130,000) |
| Bring‑forward over 2 years | $1.76m to under $1.88m ($240,000) | $1.84m to under $1.97m ($260,000) |
| Bring‑forward over 3 years | Less than $1.76m ($360,000) | Less than $1.84m ($390,000) |
Why Contribution Timing Matters
In years where contribution caps and balance thresholds increase, the timing of contributions can be just as important as the amounts contributed.
Using the bring forward rule too early can lock in limits and reduce future flexibility. In contrast, staging contributions across consecutive financial years may allow a greater overall amount to be contributed without breaching eligibility thresholds.
The optimal approach depends on factors such as current balance levels, expected investment returns, future cash flow, your age and proximity to retirement. A strategy that appears effective in isolation may produce sub‑optimal outcomes when future thresholds and indexation are considered.
This is an area where tailored advice can materially improve outcomes.
Transfer Balance Cap and Retirement Phase Decisions
The general Transfer Balance Cap (TBC) will increase from $2.0 million to $2.1 million on 1 July 2026.² This cap limits the amount that can be transferred into retirement‑phase pensions where earnings are tax‑free.
Each individual has a personal TBC that is indexed based on the unused portion of their cap at the time of indexation. As a result, the timing of pension commencements and other Transfer Balance Account events is critical.
Commencing a pension from accumulated superannuation benefits, or retaining a transition to retirement pension upon reaching age 65, triggers a credit against an individual’s personal cap. Once triggered, future indexation outcomes may be permanently affected.
For individuals currently using a transition to retirement strategy and approaching age 65 before the end of the financial year, careful consideration should be given to whether there is an advantage in transferring benefits back to the accumulation phase and commencing a new pension after 1 July 2026. The timing of these decisions can have long‑term tax implications.
Division 296 and Very Large Super Balances
From 1 July 2026, Division 296 introduces an additional layer of tax for individuals with total superannuation balances above $3 million, with higher rates applying to balances exceeding $10 million.
In broad terms, this measure applies an additional tax of between 15% to 25% to earnings attributable to the portion of a super balance above the relevant threshold. This results in an effective tax rate of approximately 30% to 40% on those earnings³.
While eligibility rules are unchanged, the long‑term after‑tax efficiency of holding very large balances within superannuation will differ depending on individual circumstances. For some, retaining funds within super may continue to produce a favourable outcome. For others, withdrawing funds or holding investments outside super may be more appropriate over time.
Division 296 also reinforces the importance of considering household‑level outcomes. Although the test applies to an individual, superannuation balances can transfer between spouses on death, potentially causing the surviving spouse to exceed the $3 million threshold unexpectedly.
Although Division 296 does not directly alter contribution rules, it highlights the need to actively monitor total super balances and consider how superannuation fits alongside other investment structures, including personal ownership, spousal ownership, family trusts and companies. For higher‑income households, this is less about a single rule change and more about maintaining a deliberate, well‑structured long‑term wealth strategy.
Payday Super and Changes to Contribution Timing
From 1 July 2026, payday super will commence⁴. Employers will be required to pay Superannuation Guarantee contributions at the same time as salary and wages, with funds required to reach the superannuation account within seven days of payday.
This replaces the current quarterly contribution framework and improves the timeliness of contributions. However, it also introduces new complexities.
Super contributions are counted against contribution caps when they are received by the fund, not when they are earned. As a result, changes in payment frequency increase the risk of contributions falling into an unintended financial year. This risk is heightened for individuals with multiple employers, employment changes or high levels of employer contributions.
Increase to the Maximum Super Contribution Base
The maximum super contribution base will increase to $270,830 per annum and will be assessed on an annual basis rather than quarterly. In practical terms, this means employers are required to pay at least the 12% superannuation guarantee contribution on earnings from 1 July each financial year, until the annual cap is reached.
For employers, this change may front‑load superannuation obligations earlier in the financial year and affect cash flow planning.
For higher income earners, this may result in:
- Larger employer contributions earlier in the financial year
- Periods later in the year where no further compulsory contributions apply
- An increased risk of exceeding concessional caps when changing roles mid‑year
When combined with payday super, these changes increase the importance of monitoring total contributions throughout the year.
Bringing the Changes Together
Taken individually, each of these changes is manageable. When combined, they highlight a broader theme. Superannuation strategy in 2026–27 is less about single rule changes and more about sequencing, timing and balance management.
Higher contribution limits create opportunity, but only where eligibility is preserved. Balance‑based thresholds mean timing decisions can have lasting effects. More frequent employer contributions improve transparency but increase the need for active oversight. Retirement phase decisions must be aligned carefully with indexation events.
A proactive review before the new financial year can help avoid unintended tax outcomes and help position you to make effective use of the opportunities created by the new rules. Speak to your financial adviser today. Contact Brett Cribb, Steve Nicholas, James Marshall and Debbie French at +61 (0)7 3007 2007, or email info@stratusfinancialgroup.com.au.
Stratus Financial Group helps individuals, families, and retirees manage their complex financial affairs and coordinate their professional advisers.
Stratus Financial Group and its advisers are Authorised Representatives of Fortnum Private Wealth Ltd ABN 54 139 889 535 AFSL 357306. This is general advice only and does not take into account your objectives, financial situation, or needs, so you should consider whether the advice is relevant to your circumstances. Always read the relevant Product Disclosure Statements (PDS) before making any financial decisions.
- Concessional and Non-Concessional Caps | Colonial First State
- Transfer Balance Caps | Australian Taxation Office
- Better targeted superannuation concessions | Australian Taxation Office
- Payday Super | Australian Taxation Office