Superannuation Changes 2026-27

The 2026-27 financial year brings several important superannuation changes: the Super Guarantee rate holds at 12%, concessional and non-concessional caps are indexed upward, Payday Super commences from 1 July requiring employers to pay SG within 7 business days of each payday, and the new Division 296 tax on super earnings above $3 million total super balance takes effect.

Data in this article is sourced from the ATO, Budget 2026-27 papers, and the Treasury Laws Amendment (Better Targeted Superannuation Concessions) Act as at 5 July 2026.

Super Guarantee: holding at 12%

The Super Guarantee rate remains at 12% for 2026-27, having reached its legislated maximum. This was the final step in the phased increase from 9.5% that began in 2014. There are no currently legislated plans to increase the SG rate beyond 12%.

Payday Super

From 1 July 2026, employers must pay the Super Guarantee contribution within 7 business days of each payday. This replaces the previous system where employers could pay quarterly (by the 28th day after the end of each quarter).

The reform is designed to:

Reduce the $5 billion in unpaid super that accumulates annually
Give employees visibility of their super contributions in near real-time
Make it easier for the ATO to identify and recover unpaid super

Employers should ensure their payroll systems are configured to make SG payments on the new schedule.

Indexed caps for 2026-27

All major contribution caps have been indexed for the 2026-27 year:

Cap	2025-26	2026-27
Concessional (before-tax)	$30,000	$32,500
Non-concessional (after-tax)	$120,000	$130,000
Bring-forward maximum	$360,000	$390,000
General Transfer Balance Cap	$2,000,000	$2,100,000
Maximum contribution base	N/A	$270,830

Concessional contributions cap: $32,500

The before-tax contributions cap increases to $32,500. This includes employer SG contributions, salary sacrifice amounts, and personal contributions claimed as a tax deduction. Contributions above the cap are taxed at your marginal rate plus an excess concessional contributions charge.

Non-concessional contributions cap: $130,000

The after-tax contributions cap increases to $130,000. The bring-forward rule allows individuals under 75 to contribute up to three times the annual cap ($390,000) in a single year. Eligibility requires total super balance below the general transfer balance cap at 30 June of the previous year.

General Transfer Balance Cap: $2,100,000

The cap on the total amount that can be transferred into retirement phase (where earnings are tax-free) increases to $2,100,000. Your personal TBC is a proportion of the general cap based on how much of the cap you have previously used.

Division 293: unchanged at $250,000

Division 293 imposes an additional 15% tax on concessional contributions for individuals whose combined income and low-tax contributions exceed $250,000. The threshold is unchanged for 2026-27. This means high-income earners pay an effective 30% tax on concessional contributions (15% contributions tax plus 15% Division 293 tax).

Division 296: new tax on high super balances

Division 296, which received Royal Assent on 13 March 2026 and takes effect from 1 July 2026, is the most significant structural change to superannuation taxation since the introduction of the transfer balance cap.

How it works

Division 296 imposes an additional tax on superannuation earnings (not contributions) for individuals with large total super balances:

Balances above $3 million: 15% additional tax on the proportion of earnings attributable to the balance above $3 million
Balances above $10 million: An additional 10% tax on earnings above $10 million

The tax applies to the earnings calculation, not realised gains. The ATO will calculate the taxable earnings proportion and issue a notice. The tax is payable personally (not from the super fund), though individuals can elect to release an amount from super to pay the liability.

Who is affected

Division 296 targets approximately 80,000 individuals with super balances exceeding $3 million. For context, the median super balance at retirement is around $200,000. The vast majority of Australians are unaffected.

Interaction with Division 293

Division 296 (tax on high balance earnings) is distinct from Division 293 (tax on high income concessional contributions). Both can apply simultaneously to an individual who earns more than $250,000 and has a super balance above $3 million.

Carry-forward and other rules

Carry-forward concessional contributions

The carry-forward rule allows individuals with a total super balance below $500,000 at 30 June of the prior year to use unused concessional cap amounts from up to five previous financial years. The eligibility threshold and five-year window are unchanged.

Downsizer contributions

No changes to downsizer contribution rules for 2026-27. Individuals aged 55 and over can contribute up to $300,000 per person ($600,000 per couple) from the sale of their main residence, in addition to other contribution caps.

Small business CGT cap

The lifetime CGT cap for small business owners contributing sale proceeds to super remains at the indexed amount of $1,935,000.

Defined benefit income cap

The defined benefit income cap is $131,250 for 2026-27. Income above this cap from defined benefit pensions is taxed at marginal rates less a 10% offset.

FAQ

What is Payday Super and when does it start?

Payday Super requires employers to pay the Super Guarantee to employees' super funds within 7 business days of each payday, rather than quarterly. It starts on 1 July 2026.

How much can I contribute to super in 2026-27 before-tax?

The concessional contributions cap is $32,500. This includes employer SG contributions (12% of your salary), salary sacrifice, and any personal contributions you claim as a tax deduction.

What happens if I exceed my contributions cap?

Excess concessional contributions are taxed at your marginal rate plus an excess concessional contributions charge. You can elect to release up to 85% of the excess from super. Excess non-concessional contributions can be released or may be subject to penalty tax.

Who pays Division 296 tax?

Individuals with a total super balance exceeding $3 million. The tax is 15% on the earnings proportion attributable to the balance above $3 million. An additional 10% applies to earnings above $10 million. The liability is calculated by the ATO and paid personally.

Does Division 293 still apply in 2026-27?

Yes. Division 293 applies an additional 15% tax on concessional contributions for individuals with combined income and low-tax contributions above $250,000. This threshold is unchanged.