BY WEALTH ADVISER
There is a quiet window each year — roughly March to June — when a few deliberate decisions about superannuation can make a material difference to your long-term wealth. Not dramatic, portfolio-reshaping decisions. Smaller ones: topping up a contribution, redirecting a bonus, splitting some super with your spouse. The kind of moves that feel unremarkable at the time but compound over decades into tens of thousands of dollars.
The 2025–26 financial year is a particularly useful one to get this right, because several things are about to change. Contribution caps are widely expected to increase from 1 July 2026. The transfer balance cap — the limit on how much you can shift into a tax-free retirement account — will rise from $2 million to $2.1 million (confirmed by the ATO). And the new payday super rules will change how and when employer contributions reach your fund. None of that means you should wait. In fact, for many of the strategies covered here, acting before 30 June is the whole point.
Start with what you have already used
Before considering any additional contributions, the first step is knowing where you stand. Every strategy discussed here interacts with caps — annual limits on how much you can contribute to super in a given financial year without incurring penalty tax. Exceed those caps and the consequences are real: excess concessional contributions are included in your assessable income and taxed at your marginal rate, with a 15 per cent tax offset to reflect the contributions tax already paid by the fund. Excess non-concessional contributions can be taxed at 47 per cent.
For the 2025–26 financial year, the concessional contributions cap is $30,000. This includes everything that goes into your super on a before-tax basis: your employer’s compulsory Superannuation Guarantee contributions (now 12 per cent of ordinary time earnings), any salary sacrifice amounts, and any personal contributions for which you claim a tax deduction.
The non-concessional contributions cap — for after-tax money — is $120,000. This applies if your total super balance was below $2 million on 30 June 2025. If your balance was at or above that threshold, your non-concessional cap is nil, meaning you cannot make after-tax contributions at all this financial year.
You can check your contribution position through your myGov account linked to the ATO. Look at your year-to-date concessional contributions, your total super balance, and whether you have any unused concessional cap amounts carried forward from previous years. This information is the foundation for every strategy that follows.
Salary sacrifice and personal deductible contributions
The most straightforward way to boost your super before 30 June is to increase your concessional contributions up to the $30,000 cap. There are two main ways to do this.
Salary sacrifice involves asking your employer to redirect part of your pre-tax salary into super. If you earn $120,000 and your employer contributes 12 per cent ($14,400) in SG, you have $15,600 of unused concessional cap. Arranging to sacrifice, say, $10,000 of your remaining salary before 30 June would use most of that space and reduce your taxable income by the same amount. At a marginal tax rate of 32 per cent (30 per cent plus 2 per cent Medicare levy, which applies to taxable income between $45,001 and $135,000 for 2025–26), that $10,000 would otherwise cost you $3,200 in tax outside super. Inside super, it is taxed at just 15 per cent ($1,500) — a net saving of $1,700.
If salary sacrifice is not practical at this stage of the year — perhaps your employer needs lead time to set it up, or your pay cycle does not allow enough remaining payments — you can achieve the same result with a personal deductible contribution. You transfer money from your bank account directly into your super fund, then submit a notice of intent to claim a deduction (an ATO “Section 290-170” form) to your fund before the earlier of: the day you lodge your tax return for the year in which the contribution was made, or the last day of the following financial year (so for a 2025–26 contribution, the outside deadline is 30 June 2027). Your fund must acknowledge the notice before the deduction is valid.
The tax outcome is identical to salary sacrifice. The practical advantage is that you can make a personal deductible contribution at any time — including a lump sum in late June — without needing your employer’s involvement.
One caution: if you earn more than $250,000 in income (including concessional super contributions), an additional 15 per cent tax applies to some or all of your concessional contributions under Division 293. That still leaves the effective rate at 30 per cent — lower than the top marginal rate of 47 per cent — but it reduces the benefit, and it is worth factoring in before committing to a large contribution.
Carry-forward contributions: using what you missed
If your total super balance was below $500,000 on 30 June 2025, you may be sitting on a valuable opportunity. The carry-forward rule allows you to use any unused concessional cap amounts from the previous five financial years, on top of the current year’s $30,000 cap.
The unused amounts are applied in order, oldest first. For 2025–26, you can potentially access unused cap space from as far back as 2020–21 (when the cap was $25,000), plus 2021–22, 2022–23, and 2023–24 (all $27,500), and 2024–25 ($30,000). If you contributed only the SG minimum in each of those years, the accumulated unused space could be substantial — potentially $50,000 to $70,000 or more on top of the current year’s cap, depending on your salary and contribution history.
Consider someone earning $90,000 who received SG contributions of roughly $10,000 to $10,800 per year over the past five years. Their unused concessional cap across those years might total around $72,000. Combined with the current year’s $30,000 cap, they could theoretically contribute up to $102,000 in concessional contributions in 2025–26 without exceeding their cap.
In practice, contributions of that size only make sense if you have the income to absorb the tax deduction and the cash to fund the contribution. But even a partial catch-up — an extra $15,000 or $20,000 — can make a meaningful difference. The tax saving is immediate, and the money begins compounding in a concessionally taxed environment from the moment it arrives.
You can check your available carry-forward amounts through ATO online services via myGov.
Non-concessional contributions: after-tax money in
If you have already maximised your concessional contributions, or if you have savings outside super that you want to move into a more tax-efficient environment, non-concessional contributions are the next consideration.
The annual non-concessional cap for 2025–26 is $120,000, available to anyone whose total super balance was below $2 million on 30 June 2025. If your balance was between $1.76 million and $1.88 million, you can contribute up to $240,000 using the bring-forward rule (accessing two years of future caps). Below $1.76 million, you can access the full three-year bring-forward of $360,000.
The bring-forward rule is triggered automatically if you contribute more than $120,000 in a single financial year. Once triggered, it locks in the cap amounts and balance thresholds that applied at the start of the bring-forward period. This matters because from 1 July 2026, the non-concessional cap is expected to increase from $120,000 to $130,000, and the transfer balance cap from $2 million to $2.1 million. If you trigger a bring-forward arrangement this year, your cap will be based on the current $120,000 figure — potentially locking you into a lower total than if you waited until July to trigger it under the higher cap.
For anyone considering a large non-concessional contribution, the timing question is worth discussing with your adviser. If the contribution is not urgent, waiting until after 1 July could give you access to a higher bring-forward total ($390,000 rather than $360,000) and higher balance thresholds. If the money is available now and you want it in super sooner, the difference may not be worth the delay — but it is a decision worth making consciously.
Spouse contributions and the tax offset
If one partner in a couple earns significantly less than the other — whether because of part-time work, a career break, or caring responsibilities — spouse contributions can serve two purposes at once. The contributing spouse makes a non-concessional contribution into their partner’s super fund from after-tax money. If the receiving spouse’s total income (including assessable income, reportable fringe benefits, and reportable employer super contributions) is below $37,000, the contributing spouse can claim a tax offset of up to $540 — calculated as 18 per cent of up to $3,000 in contributions. The offset phases out between $37,000 and $40,000 of the receiving spouse’s income.
The $540 is modest, but the real value is often in the contribution itself. Building a more balanced pair of super accounts across a couple creates more flexibility in retirement. Two more equal balances provide better options for managing the transfer balance cap as balances grow, stronger protection if the relationship ends, and — depending on each partner’s age and how benefits are structured — can improve Centrelink outcomes in some couples. From 1 July 2026, balance equalisation also becomes relevant for managing exposure to the proposed Division 296 thresholds (covered in detail in a separate article in this series).
The receiving spouse’s total super balance must have been below $2 million on 30 June 2025, and the contribution counts toward their non-concessional cap.
If one partner in a couple earns significantly less than the other — whether because of part-time work, a career break, or caring responsibilities — spouse contributions can serve two purposes at once.
Contribution splitting: moving what is already there
Distinct from spouse contributions, contribution splitting allows you to transfer up to 85 per cent of your concessional contributions from the current or previous financial year into your spouse’s super account. The money has already been contributed and taxed at 15 per cent in your fund — splitting it moves it across to your partner’s account without additional tax.
Your spouse must be under preservation age (currently 60) to receive split contributions. If they are between preservation age and 65, they must not have retired. Once they reach 65, splitting is no longer available.
Splitting does not give you a tax deduction or offset. Its value is structural: it builds the lower-balance partner’s account, improves the couple’s combined position for means-testing purposes (particularly for Centrelink, where the assets test treats each person’s super differently depending on whether they have reached Age Pension age), and creates more room under the transfer balance cap and Division 296 thresholds for the higher-balance partner.
The government co-contribution
For lower-income earners, the government co-contribution is free money that many eligible people overlook. If your If one partner in a couple earns significantly less than the other — whether because of part-time work, a career break, or caring responsibilities — spouse contributions can serve two purposes at once. ISSUE 132 MARCH 2026 3 total income is below $62,488 for 2025–26 and you make a personal after-tax contribution to your super without claiming a tax deduction, the government will contribute 50 cents for every dollar you put in, up to a maximum of $500.
To receive the full $500, your income needs to be at or below $47,488 and you need to contribute at least $1,000. The co-contribution tapers off as income rises, reducing by 3.333 cents for every dollar of income above $47,488, and cutting out entirely at $62,488.
You must earn at least 10 per cent of your income from employment or business, be under 71 at the end of the financial year, and lodge a tax return. The ATO calculates your eligibility automatically — you do not need to apply — but your super fund must have your tax file number on record, and the contribution must reach your fund before 30 June.
If you are eligible, this is one of the highest-returning investments available: a guaranteed 50 per cent return on your contribution, tax-free, with no market risk.
What is changing from 1 July 2026
Several thresholds will increase from the start of the 2026–27 financial year. The general transfer balance cap will rise from $2 million to $2.1 million — this has been confirmed by the ATO, and it will also lift the total super balance thresholds that determine eligibility for non-concessional contributions and the bring-forward rule.
The concessional contributions cap is expected to rise from $30,000 to $32,500, and the non-concessional contributions cap from $120,000 to $130,000 (with the three-year bring-forward total rising to $390,000). These cap increases are based on indexation linked to average weekly ordinary time earnings (AWOTE) and are widely expected by industry analysts, but have not yet been officially confirmed by the ATO — the announcement is typically made in late March or April.
These expected increases do not change the strategies available to you before 30 June 2026. But they do affect the planning context. If you are close to the $500,000 balance threshold for carry-forward contributions, or close to the $2 million balance threshold for non-concessional contributions, the higher thresholds from July may open doors that are currently closed. Conversely, if you are considering triggering a bring-forward arrangement, you may want to weigh whether acting now under the current caps or waiting for the expected higher caps produces a better outcome.
Your adviser can model both scenarios using your specific numbers.
For those with larger balances
If your total super balance is approaching or exceeds $3 million, the contribution strategies above intersect with the proposed Division 296 tax measures. Legislation was introduced to Parliament in February 2026, with an intended commencement date of 1 July 2026, but the bill had not received Royal Assent at the time of writing. If passed in its current form, the measures would apply an additional 15 per cent tax to earnings attributable to the portion of a person’s total super balance above $3 million and up to $10 million, and an additional 25 per cent tax to earnings attributable to the portion above $10 million. Combined with the existing 15 per cent fund-level tax, the effective rates on those portions of earnings would be 30 per cent and 40 per cent respectively. Both thresholds would be indexed to the consumer price index — the $3 million threshold in $150,000 increments and the $10 million threshold in $500,000 increments. The Division 296 measures are covered in detail in a separate article in this series.
For couples where one partner has a balance well above $3 million and the other has room to grow, the combination of contribution splitting, spouse contributions, and strategic use of the non-concessional cap can serve as both a retirement planning and a tax planning exercise. Rebalancing between partners — within the rules — can reduce the overall Division 296 exposure while improving the couple’s combined retirement flexibility.
This is not a decision to make without professional advice. The interaction between contribution caps, transfer balance caps, Division 296 thresholds, and Centrelink means tests is genuinely complex, and the right answer depends on each couple’s specific circumstances.
But the EOFY window is often when the conversation needs to start, because the strategies available before 30 June differ from those available after it.
Discussion points for your adviser
At your next review — ideally before the end of May — consider raising these questions:
• How much concessional cap space do I have remaining for 2025–26, and do I have any unused carry-forward amounts from previous years?
• Would a personal deductible contribution before 30 June reduce my tax bill meaningfully, given my marginal rate and my Division 293 position?
• Am I eligible for the government co-contribution, and have I provided my tax file number to my super fund?
• If I am considering a large non-concessional contribution, should I act before 30 June or wait until July when the caps and balance thresholds are expected to increase?
• As a couple, would contribution splitting or spouse contributions improve our combined position — for retirement income, for Centrelink purposes, or for Division 296 planning?
• Have I checked my total super balance and contribution history through myGov recently, and does everything look correct?
References
1. Australian Taxation Office. “Caps, limits and tax on super contributions.” Including concessional and non-concessional caps, carry-forward rules, bring-forward arrangements, and excess contributions. ato.gov.au.
2. Australian Taxation Office. “Superannuation-related tax offsets.” Spouse contribution tax offset — eligibility, income thresholds, and calculation. ato.gov.au.
3. Australian Taxation Office. “Super co-contribution.” Eligibility requirements, income thresholds ($47,488 / $62,488 for 2025–26), and payment details. ato.gov.au.
4. Australian Taxation Office. “Notice of intent to claim or vary a deduction for personal super contributions.” Deadlines, approved forms, and fund acknowledgment requirements. ato.gov.au.
5. Australian Taxation Office. “General transfer balance cap indexation on 1 July 2026.” Confirmed increase to $2.1 million. ato.gov.au.
6. Heffron SMSF Solutions. “It’s a new year — but will there be new caps?” Analysis of expected 2026–27 cap indexation based on AWOTE data. heffron.com.au.
7. Parliamentary Library. “Treasury Laws Amendment (Building a Stronger and Fairer Super System) Bill 2026.” Bills Digest No. 48, 2025–26. Division 296 tax structure, thresholds, and indexation. aph.gov.au.
