Highlights

  • it is calculated by taking the concessional contributions cap, multiplying by 100 and dividing by the super guarantee rate, then rounding down to the nearest $10.
  • Under Payday Super, which has applied since 1 July 2026, employers must pay 12% super guarantee on qualifying earnings within seven business days of each payday.
  • Contributions then resume in the new income year, when the count starts again from zero.
  • In other words, the MCB does not reduce the rate of compulsory super.

A new annual earnings ceiling can change when compulsory super payments stop for employees receiving high salaries or bonuses.

Where $270,830 comes from

The figure is the maximum contribution base, or MCB. Under the old system it was set quarterly. Under Payday Super, it is an annual amount for the income year. it is calculated by taking the concessional contributions cap, multiplying by 100 and dividing by the super guarantee rate, then rounding down to the nearest $10. For 2026–27 that is $32,500 × 100 ÷ 12, which equals about $270,833, rounded down to $270,830. That design is deliberate. At the 12% super guarantee rate, 12% of $270,830 is $32,499.60, almost exactly the $32,500 concessional cap. The MCB exists so that compulsory super on its own does not push an employee into excess concessional contributions.

What happens once the limit is reached

Under Payday Super, which has applied since 1 July 2026, employers must pay 12% super guarantee on qualifying earnings within seven business days of each payday. The ATO's MCB guidance says that once an employee's qualifying earnings for the year reach $270,830, the employer "do[es] not need to pay" super guarantee on further qualifying earnings for the rest of that income year. Contributions then resume in the new income year, when the count starts again from zero. In other words, the MCB does not reduce the rate of compulsory super. It caps the amount of earnings the rate applies to, and under the annual system that cap is measured across the whole year rather than quarter by quarter. This is the first income year the annual MCB has applied. The ATO notes earnings paid up to 30 June 2026 fall under the old quarterly rules, so 2026–27 is the first year many high earners and their payroll teams will see the annual cut-off in action.

The ATO's own worked example

The ATO illustrates the rule with an employee it calls Michael. He earns $18,750 a month, so his 11 pays from July to May total $206,250. On 17 May he receives a $100,000 bonus, taking his qualifying earnings for the year to $306,250. Only $64,580 of the bonus falls under the MCB, so super guarantee on the bonus is 12% of $64,580, or $7,749.60. no super guarantee is due for the rest of 2026–27. Michael's contributions restart with the 5 July 2027 payday. The example shows why the timing of a large payment matters. Without the bonus, Michael's 12 monthly pays would total $225,000 for the year, comfortably under the MCB, and super guarantee would have been due on every one of them. Hypothetical example: suppose the same $100,000 bonus had instead been paid in July 2027, early in the following income year. Michael's 2026–27 qualifying earnings would then be 12 × $18,750, or $225,000. Super guarantee for the year would be 12% of that, or $27,000, with no pay cut off. The bonus would instead count toward the 2027–28 MCB, possibly bringing forward the point at which contributions stop in that year. This variation assumes his salary is otherwise unchanged and is illustrative only.

Hypothetical example: a $300,000 salary

Hypothetical example: an employee earns a $300,000 salary paid evenly at $25,000 a month, with every dollar counting as qualifying earnings and the first pay in July. This assumes no award or agreement requires extra super. After 10 monthly pays, qualifying earnings total $250,000, and super guarantee has been paid on all of it.