{"id":17208,"date":"2026-05-12T19:01:35","date_gmt":"2026-05-12T13:31:35","guid":{"rendered":"https:\/\/befreeltd.com\/au\/?p=17208"},"modified":"2026-05-20T19:12:52","modified_gmt":"2026-05-20T13:42:52","slug":"superannuation-concessional-contributions-cap","status":"publish","type":"post","link":"https:\/\/befreeltd.com\/au\/resources\/blogs\/superannuation-concessional-contributions-cap\/","title":{"rendered":"Superannuation Concessional Contributions Cap 2026: What You Need to Know"},"content":{"rendered":"\t\t
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Superannuation is one of the most tax-effective savings vehicles available to Australian individuals and business owners. Making concessional (before-tax) contributions can significantly reduce taxable income – but only up to the annual cap. Exceed that cap and the tax benefits reverse quickly, with excess contributions taxed at the individual’s marginal rate rather than the concessional 15%.<\/p>

With the end of the 2025-26 financial year approaching and new thresholds applying from 1 July 2026, understanding the concessional contributions cap – what counts, what the limits are, and how to use carry-forward rules – is important for business owners, company directors, employees, and self-employed individuals alike.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t

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What are Concessional Contributions?\n<\/h2>\t\t\t\t<\/div>\n\t\t\t\t
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Concessional contributions are super contributions made from pre-tax income. They are taxed at a flat rate of 15% inside the super fund, which is significantly lower than most individuals’ marginal tax rates. This is the core tax advantage that makes contributing to super before the cap is reached an attractive strategy for most working Australians.<\/p>

The main types of concessional contributions include:<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t

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Contribution Type<\/strong><\/p><\/td>

Who Makes It<\/strong><\/p><\/td>

Example<\/strong><\/p><\/td><\/tr>

Employer SG contributions<\/p><\/td>

Employer<\/p><\/td>

Mandatory 11.5% (FY2025-26) or 12% (FY2026-27) of ordinary time earnings<\/p><\/td><\/tr>

Salary sacrifice contributions<\/p><\/td>

Employee (via employer)<\/p><\/td>

Employee directs a portion of pre-tax salary into super<\/p><\/td><\/tr>

Personal deductible contributions<\/p><\/td>

Self-employed or individual<\/p><\/td>

Personal contributions claimed as a tax deduction via a notice of intent<\/p><\/td><\/tr>

Defined benefit contributions<\/p><\/td>

Employer (DB fund)<\/p><\/td>

Notional contributions calculated under specific rules<\/p><\/td><\/tr><\/tbody><\/table>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t

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The Concessional Contributions Cap for 2025-26 and 2026-27\n<\/h2>\t\t\t\t<\/div>\n\t\t\t\t
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The concessional contributions cap is indexed to Average Weekly Ordinary Time Earnings (AWOTE) in $2,500 increments. The cap for FY2025-26 is $30,000. The cap for FY2026-27 is expected to remain at $30,000, as the indexation threshold has not yet been reached, though this should be confirmed with the ATO or a financial adviser closer to 1 July 2026.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t

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Financial Year<\/strong><\/p><\/td>

Concessional Cap<\/strong><\/p><\/td>

SG Rate<\/strong><\/p><\/td>

Tax Rate Inside Fund<\/strong><\/p><\/td><\/tr>

2023-24<\/p><\/td>

$27,500<\/p><\/td>

11%<\/p><\/td>

15%<\/p><\/td><\/tr>

2024-25<\/p><\/td>

$30,000<\/p><\/td>

11.5%<\/p><\/td>

15%<\/p><\/td><\/tr>

2025-26<\/p><\/td>

$30,000<\/p><\/td>

11.5%<\/p><\/td>

15%<\/p><\/td><\/tr>

2026-27 (projected)<\/p><\/td>

$30,000<\/p><\/td>

12%<\/p><\/td>

15%<\/p><\/td><\/tr><\/tbody><\/table>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t

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Note: High-income earners with income above $250,000 (including concessional super contributions) pay an additional 15% tax on concessional contributions under Division 293 tax, bringing the effective rate to 30% – still lower than the top marginal rate of 47% but less advantageous than for standard-rate taxpayers.<\/em><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t

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What Counts Towards the Concessional Cap?\n<\/h2>\t\t\t\t<\/div>\n\t\t\t\t
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All concessional contributions made to any super fund during the financial year count towards the cap. This includes contributions made by an employer on the individual’s behalf, salary sacrificed amounts, and any personal contributions for which a tax deduction is claimed.<\/p>

For employees, even if they make no voluntary contributions, their employer’s mandatory SG contributions alone may consume a significant portion of the cap – particularly for higher-income earners. For example:<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t

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Annual Salary<\/strong><\/p><\/td>

SG at 11.5% (FY2025-26)<\/strong><\/p><\/td>

Cap Remaining for Voluntary Contributions<\/strong><\/p><\/td><\/tr>

$100,000<\/p><\/td>

$11,500<\/p><\/td>

$18,500<\/p><\/td><\/tr>

$150,000<\/p><\/td>

$17,250<\/p><\/td>

$12,750<\/p><\/td><\/tr>

$200,000<\/p><\/td>

$23,000<\/p><\/td>

$7,000<\/p><\/td><\/tr>

$261,000+<\/p><\/td>

$30,015 (cap reached)<\/p><\/td>

$0 (SG alone hits the cap)<\/p><\/td><\/tr><\/tbody><\/table>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t

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This demonstrates why it is important for higher-income earners to monitor their SG contributions alongside any salary sacrifice or personal deductible contributions, to avoid inadvertently breaching the cap.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t

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The Carry-Forward Rule: Using Unused Cap Amounts\n<\/h2>\t\t\t\t<\/div>\n\t\t\t\t
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Since 1 July 2019, individuals with a total superannuation balance (TSB) below $500,000 on 30 June of the prior year can carry forward unused concessional cap amounts from the previous five financial years and contribute more than the standard annual cap in a single year.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t

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How Carry-Forward Works\n<\/h2>\t\t\t\t<\/div>\n\t\t\t\t
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Unused cap amounts from FY2019-20 onwards accumulate and can be accessed in any subsequent year, provided the TSB condition is met. Unused amounts expire after five years on a rolling basis – the oldest year’s unused amount drops off each year.<\/p>

For example, a sole trader who contributed only SG-equivalent amounts in prior years and has a super balance below $500,000 may be able to make a large personal deductible contribution in FY2025-26 to use accumulated carry-forward amounts, significantly reducing taxable income in a high-income year.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t

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Financial Year<\/strong><\/p><\/td>

Annual Cap<\/strong><\/p><\/td>

Contributions Made<\/strong><\/p><\/td>

Unused Amount (Carry-Forward)<\/strong><\/p><\/td><\/tr>

2020-21<\/p><\/td>

$25,000<\/p><\/td>

$10,000<\/p><\/td>

$15,000<\/p><\/td><\/tr>

2021-22<\/p><\/td>

$27,500<\/p><\/td>

$12,000<\/p><\/td>

$15,500<\/p><\/td><\/tr>

2022-23<\/p><\/td>

$27,500<\/p><\/td>

$27,500<\/p><\/td>

$0<\/p><\/td><\/tr>

2023-24<\/p><\/td>

$27,500<\/p><\/td>

$15,000<\/p><\/td>

$12,500<\/p><\/td><\/tr>

2024-25<\/p><\/td>

$30,000<\/p><\/td>

$30,000<\/p><\/td>

$0<\/p><\/td><\/tr>

2025-26 (available cap)<\/p><\/td>

$30,000 + $43,000 carry-forward = $73,000<\/p><\/td>

–<\/p><\/td>

–<\/p><\/td><\/tr><\/tbody><\/table>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t

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The total available cap in FY2025-26 in this example would be $73,000 – the standard $30,000 cap plus $43,000 in accumulated unused amounts from prior years, provided the TSB was below $500,000 on 30 June 2025.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t

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What Happens If You Exceed the Concessional Cap?\n<\/h2>\t\t\t\t<\/div>\n\t\t\t\t
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Exceeding the concessional contributions cap has direct tax consequences. The ATO automatically assesses excess concessional contributions and issues an excess concessional contributions tax assessment.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t

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The Tax Treatment of Excess Contributions\n<\/h2>\t\t\t\t<\/div>\n\t\t\t\t
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