How Much Can You Put Into Super Before Tax in 2026-27? The New $32,500 Cap Explained
If you salary sacrifice into super, or you're a sole trader who claims a deduction for personal contributions, there's a number you need to know for this financial year: $32,500. That's the new concessional contributions cap for 2026-27, up from $30,000 the year before. It's the most your employer's compulsory contributions, any salary sacrifice, and any personal contributions you claim as a tax deduction can add up to before the extra tax and paperwork headaches start.
The increase itself is straightforward enough, but the details around it aren't. The superannuation guarantee rate hasn't actually moved this year, sole traders make “concessional” contributions in a completely different way to employees, and there's a carry-forward rule that lets some people contribute well above $32,500 if they've got room left over from previous years. On top of that, if your income is high enough, a second tax kicks in on top of the normal one. We'll go through all of it here, with real numbers, so you know exactly where you stand for the rest of this financial year.
Published 18 September 2026
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What Counts as a “Concessional” Contribution?
A concessional contribution is any amount going into your super that gets taxed at 15% inside the fund, rather than coming out of money you've already paid income tax on. For most employees, that's two things: the compulsory contributions your employer has to make under the super guarantee, and anything extra you choose to salary sacrifice out of your pre-tax pay. If your work involves reportable fringe benefits or you're on a total package arrangement, it's worth checking your payslip against your super statement occasionally, because the two don't always show the same number.
For a sole trader or anyone without an employer making contributions on their behalf, a concessional contribution looks different again — you pay money into your own super fund from your own bank account, then claim a tax deduction for it when you lodge your return. We'll come back to exactly how that works further down, because the mechanics trip a lot of self-employed people up.
Either way, the $32,500 cap for 2026-27 covers all of it added together. It doesn't matter whether the money came from an employer, a salary sacrifice arrangement, or your own deduction claim — it all counts toward the same limit.
How Much Has the Cap Actually Gone Up for 2026-27?
The concessional contributions cap has climbed steadily over the past decade, and 2026-27 is another step up:
• 2017-18 to 2020-21: $25,000
• 2021-22 to 2023-24: $27,500
• 2024-25 and 2025-26: $30,000
• 2026-27: $32,500
That's according to the ATO's own contributions caps page, last updated 11 September 2026. The cap isn't set by an annual decision — it's indexed to Average Weekly Ordinary Time Earnings (AWOTE) and only moves upward in $2,500 increments once wage growth has pushed the indexed figure past the next threshold. That's part of why the cap sat at $27,500 for three straight years before jumping, and it's a reasonable bet it'll sit at $32,500 for a year or two before the next increase, though that depends entirely on how wages move from here.
An extra $2,500 of headroom sounds modest, but for someone who's been maxing out their concessional contributions every year, it's real money — an extra $2,500 taxed at 15% inside super instead of at your marginal rate can mean a meaningful difference in your tax bill, particularly if you're on the 30% or 37% brackets.
The Super Guarantee Rate Is Still 12% — So What's Actually Changed This Year?
If you've been following the gradual super guarantee increases over the last few years, you might be expecting another rate rise this financial year. There isn't one. The super guarantee rate reached 12% on 1 July 2025 and stays at 12% for 2026-27.
What has changed is when that 12% has to be paid. From 1 July 2026, Australia moved to “payday super,” which means employers generally need to pay your super guarantee contributions within a few business days of each payday, calculated on your qualifying earnings for that pay cycle, rather than the old system of quarterly lump payments with a much longer lead time. For most employees this is a good thing — your super lands in your account sooner and starts earning returns earlier — but it does mean the timing of contributions near 30 June looks a little different to what you might be used to.
If you're someone who tracks contributions closely against the cap (which is worth doing if you're also salary sacrificing), it's worth checking your fund statement in early July to make sure everything that should have landed in 2026-27 actually did, rather than assuming it followed the old quarterly rhythm.
What Happens If You Go Over the $32,500 Cap?
Exceeding the concessional cap isn't the financial disaster it used to be, but it's not something to shrug off either. Since 2013-14, any amount over the cap is simply added to your assessable income and taxed at your normal marginal rate, with a 15% tax offset applied to account for the contributions tax your fund already paid. In practical terms, if you're on the 32.5% marginal rate and you go $2,000 over the cap, you'll pay tax on that $2,000 at your marginal rate less the 15% already paid — not a punitive double tax, but not nothing either, especially once you add in the fact that excess concessional contributions also count toward your non-concessional cap unless you elect to release them from your super fund.
There used to be an additional penalty on top of this — the Excess Concessional Contributions charge, essentially an interest charge for the period between when the tax would normally have been paid and when it's actually assessed. That charge was abolished for contributions made from 1 July 2021 onwards, so for anyone going over the cap in 2026-27, it's the marginal-rate-plus-offset treatment only. That's a meaningfully softer outcome than what applied a decade ago, but it's still simplest — and cheapest — to just stay under $32,500 in the first place if you can help it.
One thing that catches people out: the ATO doesn't stop your fund from accepting the contribution, and your employer generally has no way of knowing what you're earning elsewhere or what you've salary sacrificed with a different employer. The excess only shows up after you lodge your tax return and the ATO matches contributions reported by all your funds against the cap. If you've changed jobs partway through the year, or you're being paid by more than one employer, that's exactly the situation to watch.
The Carry-Forward Rule: Using Unused Cap From Previous Years
If $32,500 isn't enough for what you're trying to do this year — maybe you've had an unusually good year of self-employed income, or you're catching up on retirement savings after a career break — the carry-forward (sometimes called “catch-up”) rule might help.
Here's how it works: since 2018-19, any part of your concessional cap you didn't use in a given year has been tracked and can be carried forward for up to five years. So if your unused amounts from 2021-22 through 2025-26 add up to, say, $18,000, you could potentially contribute up to $32,500 plus that $18,000 — a total of $50,500 — in 2026-27 and still stay within your available cap.
There's one eligibility condition that matters a lot: your total superannuation balance has to be under $500,000 as at 30 June of the previous financial year (so, for using carry-forward amounts in 2026-27, your balance needed to be under $500,000 at 30 June 2026). This threshold applies per person, based on your own super balance across all your funds — not household income, not your partner's balance. If you're right on the border, it's worth checking your balance from your fund's annual statement or through myGov before assuming you're eligible, because the ATO checks strictly against that figure and won't apply any discretion if you're a dollar over.
The other thing to know is that the ATO tracks your unused amounts automatically once you start using carry-forward, and you can see the exact figure available to you through the ATO's online services in myGov, under the “Super” tab — you don't need to calculate it by hand from old payment summaries.
Division 293 Tax: The Extra 15% for Higher Income Earners
Higher-income earners face an additional layer on top of everything above: Division 293 tax. If your income for surcharge purposes plus your low-tax contributions add up to more than $250,000, you'll pay an extra 15% on the lesser of the amount over that threshold or your taxable contributions — effectively doubling the tax on the affected portion of your concessional contributions, from 15% to 30%.
The $250,000 threshold hasn't moved for 2026-27 and, unlike the concessional cap, isn't indexed — it's a fixed figure set in legislation, which the ATO confirms on its current Division 293 page. “Income” for this purpose is calculated the same way as it is for Medicare levy surcharge purposes, and it adds together your taxable income, reportable fringe benefits, net investment losses (including negative gearing losses), net rental property losses, and a few less common items like family trust distribution tax amounts, before adding your low-tax super contributions on top.
Worked example: say your income for this purpose comes to $260,000 and your concessional contributions for the year are $32,500. You're $10,000 over the $250,000 threshold, which is less than your $32,500 in contributions, so Division 293 tax applies to the smaller figure — the $10,000 — at 15%, meaning an extra $1,500 payable. The ATO issues a separate Division 293 assessment after you lodge your return, and you can choose to pay it from your own funds or have it released from your super balance.
This is exactly the kind of area where a rental property loss or an unusually large capital gain in the same year can unexpectedly tip someone over the $250,000 threshold who wouldn't otherwise be anywhere near it, so it's worth a quick projection before 30 June if you know a large one-off item of income is coming.
Sole Traders: How Do You Actually Make a Concessional Contribution?
This is the part of the concessional cap that trips up self-employed people more than any other, because there's no payroll system doing it automatically in the background.
If you're a sole trader, you make a personal contribution into your super fund the same way you'd make any bank transfer — from your business or personal account into your super account, at whatever times during the year suit your cash flow. On its own, that contribution isn't concessional; it's simply an ordinary contribution using your own after-tax money. It only becomes “concessional” once you do two more things: submit a valid “notice of intent to claim a tax deduction” to your super fund, and receive an acknowledgment from the fund before you lodge your tax return (or before 30 June of the following year, whichever comes first). Once that's done, you claim the amount as a deduction on your tax return, which is what brings it inside the $32,500 cap and triggers the 15% contributions tax at the fund level instead of leaving it taxed at your marginal rate.
A few practical points worth knowing if this applies to you. Because there's no employer withholding tax and forwarding contributions for you, the whole $32,500 cap is available for personal contributions if you have no other employer-based super at all — but if you're a sole trader who also works part-time as an employee somewhere and receives super guarantee contributions from that job, those employer contributions come off the same $32,500 total before you work out how much room is left for your own deductible contribution.
Timing matters more for sole traders than for employees, because your income can swing significantly from quarter to quarter. A common approach is to hold off on the bulk of a deductible super contribution until closer to the end of the financial year, once you have a clearer picture of your actual taxable income for the year and how close you are to a higher tax bracket, rather than committing to a fixed amount in July that might turn out to be either too conservative or, worse, enough to push you over the cap once combined with other income.
If you also pay PAYG instalments, it's worth talking to your tax agent about how a planned super contribution affects your instalment income estimate for the year — getting this wrong doesn't cause a problem with your super, but it can leave you with either an unexpectedly large tax bill or a large refund at year end, neither of which is ideal for managing cash flow in a small business.
Making the Most of the New Cap Before 30 June 2027
A few practical steps make sense for most people reading this, whether you're an employee, a sole trader, or a bit of both. Check your current-year contributions against $32,500 well before June, not in the last week — your fund's member portal or the ATO's online services in myGov both show total concessional contributions received for the year, and it's a five-minute check that avoids an unpleasant surprise.
If you've got unused cap from previous years and your total super balance was under $500,000 at 30 June 2026, work out with your tax agent or financial adviser whether it makes sense to use some of that carried-forward amount this year, particularly if you've had a higher-income year or you're expecting a capital gain that a larger deductible super contribution could help offset.
If you're anywhere near the $250,000 Division 293 threshold, get a rough projection of your income for surcharge purposes done before you commit to a specific contribution amount, since going over by even a small amount changes the effective tax rate on that portion of your contributions.
And if you're self-employed, make sure the notice of intent to claim paperwork with your fund is actually lodged and acknowledged before you lodge your tax return — a deduction claimed without a valid notice of intent on file is one of the more common reasons a sole trader's super deduction gets queried.
Frequently Asked Questions
Does the $32,500 cap include my employer's compulsory super guarantee contributions?
Yes. The cap covers your employer's compulsory contributions, any salary sacrifice, and any personal contributions you claim as a deduction, all added together — not just the amount you personally choose to contribute.
What if I have two jobs and both employers pay super guarantee?
Both employers' contributions count toward the same $32,500 cap for the year. Neither employer will know what the other is contributing, so it's on you to track the combined total, particularly if your combined income is high enough that the standard super guarantee contributions alone start approaching the cap.
Can I still use carry-forward contributions if my total super balance is $520,000?
No — the total superannuation balance test for carry-forward is a hard cut-off at $500,000, tested as at 30 June of the previous financial year. At $520,000, you wouldn't be eligible to use carry-forward amounts this year, even if you have plenty of unused cap sitting from previous years.
Do I need to declare excess contributions myself, or does the ATO catch it automatically?
The ATO matches contribution data reported by all your super funds against your cap after you lodge your tax return, and will issue you an excess concessional contributions determination if you've gone over — you don't need to self-report it during the year, though it's obviously better to avoid going over in the first place.
Is the super guarantee rate still 12%, or is it going up again?
It's staying at 12% for 2026-27. That rate was reached on 1 July 2025 as the final step of a legislated schedule, and there's no further scheduled increase currently in place. What changed for 2026-27 is the payday super timing rule, not the percentage.
As a sole trader, how do I actually make a “concessional” contribution?
Transfer the money into your super fund like any personal contribution, then lodge a “notice of intent to claim a tax deduction” with your fund and get their written acknowledgment before you lodge your tax return. Only once you've done that and claimed the deduction does the contribution count as concessional and get taxed at 15% inside your fund rather than at your marginal rate.
For related reading, see our guides on How to Salary Sacrifice Super, the Superannuation Contribution Tax Deduction Guide, and What to Do Before 30 June to Reduce Tax in Australia.
If you'd like help working out exactly how much room you have left under the cap, or whether carry-forward or a personal deductible contribution makes sense for your situation, you can start your online tax return with Baron Tax & Accounting or book a consultation — our contact details are below.
Baron Tax & Accounting
— 758 Underwood Road, Rochedale South QLD 4123
— +61 7 3706 3147
— 1300 087 213
— info@baronaccounting.com
— Mon–Fri 09:30–17:00.
This article provides general information only and does not constitute personal tax or financial advice. It does not take into account your objectives, financial situation or needs. Tax rules change and apply differently to each person's circumstances. Before acting, please seek advice from a registered tax agent. Baron Tax & Accounting accepts no liability for any loss arising from reliance on this article. Source references: ATO (ato.gov.au) and other Australian government agencies, current as at the date of publication.
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