Australians trying to build their retirement savings have more room to do it this financial year. From 1 July 2026, the concessional (before-tax) contributions cap rose to $32,500 and the non-concessional (after-tax) cap to $130,000, according to the ATO.

These are the first increases since 2024–25. With three months of 2026–27 already gone, now is a sensible time to check how much of the new room is left. Salary sacrifice arrangements and personal contribution plans are easier to adjust early than in a June rush.

Why the caps moved by $2,500 and $10,000

The caps are not set each year by the Treasurer. They are indexed under existing law, so the latest rise is automatic rather than a new policy.

The concessional cap is linked to wages growth and only moves in $2,500 steps. That explains why it stayed at $30,000 for two years before stepping up. The non-concessional cap is set at four times the concessional cap, so it went from $120,000 to $130,000.

ATO figures show how gradually the caps have risen. The concessional cap was $25,000 from 2017–18 to 2020–21, then $27,500 for three years, then $30,000 for 2024–25 and 2025–26.

The general transfer balance cap was also indexed. It limits how much can be moved into tax-free retirement-phase pensions and is now $2.1 million, up from $2 million.

What counts against the $32,500 before-tax limit

Concessional contributions are taxed at 15% in the fund. They include employer super guarantee (SG) payments, salary sacrifice, and personal contributions for which a Tax deduction is claimed.

The SG rate is 12% and has no further legislated increases. Payday Super began on 1 July 2026, so employer contributions now arrive with each pay cycle, and members can see their progress towards the cap throughout the year.

The SG maximum contribution base is now an annual figure: $270,830 for 2026–27. The ATO calculates it from the concessional cap. Above that level of Earnings an employer is generally not required to pay SG, which helps stop compulsory contributions alone pushing a high earner over the cap.

New parents should note that the government's 12% super contribution on Paid Parental Leave also counts towards the concessional cap.

A worked example: how much salary sacrifice room is left?

The following example is hypothetical and simplified.

Priya earns a salary of $110,000 in 2026–27. Her employer's 12% SG contributions come to $13,200 over the year. That leaves $19,300 of her $32,500 concessional cap unused ($32,500 minus $13,200).

If she salary sacrificed the full $19,300, it would be taxed at 15% in her fund rather than at her marginal rate. At $110,000, her marginal rate is 30%, plus the 2% Medicare levy, so each sacrificed dollar would save her roughly 17 cents in tax. On $19,300, the saving is about $3,281 ($19,300 x 17%).

Salary sacrifice generally needs to be agreed with the employer and applied to pay not yet earned.

The trade-off is that the money is generally locked away until preservation age and retirement. Whether that suits someone depends on individual circumstances.

Carry-forward: extra room for balances under $500,000

People who have not used their full concessional cap in recent years may be able to contribute more than $32,500. Under the carry-forward rules, unused cap amounts can be used if the member's total super balance was under $500,000 at the previous 30 June.

The ATO says unused amounts are available for a maximum of five years, after which they expire. Under that rule, unused amounts from 2021–22, when the cap was $27,500, are in their last year of availability in 2026–27.

This can suit people with irregular incomes, those returning from a career break, or anyone with a one-off Capital Gain who wants to claim a deduction for a larger personal contribution. Checking available amounts through myGov before contributing can help avoid an accidental excess.

After-tax limits, bring-forward thresholds and going over the caps

The $130,000 non-concessional cap applies to after-tax money, such as personal contributions for which no deduction is claimed.

Eligible members can bring forward up to three years of caps. How much they can bring forward depends on their total super balance at 30 June 2026, according to the ATO:

  • under $1.84 million: up to $390,000 over three years
  • $1.84 million to under $1.97 million: up to $260,000 over two years
  • $1.97 million to under $2.1 million: $130,000, with no bring-forward
  • $2.1 million or more: nil

Age rules also apply. Anyone who triggered a bring-forward in an earlier year under the old $120,000 cap generally stays on that arrangement until it ends. They do not get the higher amount part-way through.

Downsizer contributions of up to $300,000 per person, for eligible people aged 55 or older, sit outside both caps. They still count towards the total super balance.

If the caps are exceeded, excess concessional contributions are included in the member's assessable income and taxed at their marginal rate, with an offset for the 15% already paid by the fund. The ATO notes that the old excess concessional contributions charge no longer applies to excess amounts from 2021–22 onwards.

Excess non-concessional contributions are treated more harshly unless the member elects to release the excess and associated earnings. Tracking contributions across multiple funds matters here.

High-income earners also face Division 293 tax, an extra 15% on concessional contributions for those whose combined income and concessional contributions exceed $250,000. That threshold has not changed for 2026–27.

Key dates and what to watch for the rest of 2026–27

The caps now apply until at least 30 June 2027. Personal deductible contributions must reach the fund by that date to count for 2026–27, and funds often set earlier cut-offs.

Anyone planning a claim needs to lodge a valid notice of intent with their fund and receive its acknowledgement before lodging their tax return. With Payday Super now in place, it is also worth checking that employer contributions are actually arriving each pay period.

Wealthier members should keep in mind that 30 June 2027 is also the date used to test total super balances for the new Division 296 tax on balances above $3 million.

Further indexation of the caps will depend on wages data. Any new figure is expected to be confirmed by the ATO before 1 July 2027. A registered tax agent or licensed financial adviser may help assess what suits individual circumstances.