FY26 Superannuation Guide: All the Key Changes You Need to Know

Effective from the 1st of July 2025, several important changes to superannuation limits are taking place. Staying on top of these updates is crucial for planning your contributions and ensuring you can manage your retirement savings more effectively.

This guide will walk you through the key changes.

Disclaimer: This information is for educational purposes only and is not financial advice. Superannuation and tax rules are complex. Please seek professional advice before making any financial decisions.

1. Superannuation Guarantee (SG) Reaches 12%

The Superannuation Guarantee (SG) is the compulsory contribution your employer must make to your super fund. You can find the latest rates on the ATO website.

• As of 1 July 2025, the SG rate has increased from 11.5% to its legislated target of 12% per annum.
• There are no further increases to the SG rate currently scheduled.
• This means if you earn $120,000 per year, your employer's contribution will rise from $13,800 in FY25 to $14,400 in FY26.
• If you have an existing salary sacrifice arrangement, it's urgent that you review it to account for this change.

2. Maximum Super Contribution Base

The 12% SG rate only applies to your earnings up to a specific limit, known as the maximum super contribution base. If your earnings in a quarter exceed this limit, your employer is not required to make SG contributions on the excess amount.

• From 1 July 2025, this quarterly base has increased to $67,310 per quarter.
• This adjustment is indexed annually with average weekly ordinary time earnings.
• While this may not affect those with a stable income below the cap, individuals with high or variable incomes should take note.

3. Super on Government-Funded Parental Leave Pay

Starting 1 July 2025, a significant change benefits new parents. Eligible parents and carers of a child born or adopted on or after this date who receive government-funded Parental Leave Pay will also receive a Paid Parental Leave Superannuation Contribution (PPLSC).

• This contribution will be paid directly into the parent's super fund by the employer as an annual lump sum.
• The payment will be 12% of the total parental leave pay for the financial year.
• It will also include an interest component to compensate for the payment delay and any forgone investment returns.

4. Concessional Contribution Cap

Concessional contributions are pre-tax contributions, such as employer SG payments, salary sacrifice, and personal deductible contributions, that are taxed at a concessional rate of 15% inside super. The concessional contribution cap sets the maximum amount of these contributions you can make in a financial year.

• For the 2025–26 financial year, the general concessional contributions cap remains unchanged at $30,000.
• However, your personal limit may be higher thanks to the carry-forward rule.

5. Carry-Forward Concessional Contributions

If your total super balance was less than $500,000 on 30 June of the previous financial year, you can contribute more than the general cap by using unused cap amounts from up to five previous financial years.

• For example, if your super balance on 30 June 2025 was under $500,000, in FY26 you can use any unused cap amounts from FY21 through to FY25, in addition to the standard $30,000 cap.
• The oldest available unused cap amounts are applied first once you exceed the current year's general cap.
• In an extreme case, an eligible person who has made no contributions since FY21 could contribute up to $167,500 in FY26 and claim it as a tax deduction. This compares to a maximum of $162,500 in FY25.

This strategy can provide significant tax savings for those with a one-off high-income event, like selling an investment property. You can check your unused cap and total super balance through your MyGov ATO service.

6. Non-Concessional Contributions Cap

Non-concessional contributions are made with after-tax money (like savings from your wages) and are not taxed again when they enter your super fund. The annual non-concessional cap is always four times the concessional cap.

• Since the concessional cap is unchanged, the general non-concessional cap for the 2025-26 financial year also remains the same at $120,000.
• To be eligible to make these contributions in FY26, your total super balance must have been less than $2.0 million on 30 June 2025 (this threshold has increased from $1.9 million).

7. The Bring-Forward Rule

Similar to concessional contributions, there's a rule that allows you to exceed the annual non-concessional cap. The bring-forward rule lets you bring forward caps from up to two future years, instead of using unused caps from previous years.

• In FY26, an eligible individual whose total super balance on 30 June 2025 was under $1.76 million can make a one-off non-concessional contribution of $360,000.
• If they do, no further non-concessional contributions will be allowed for the next two financial years.
• You can check your history through your MyGov ATO service.

8. General Transfer Balance Cap

The transfer balance cap is a lifetime limit on the amount you can move from your taxed accumulation account into a tax-free retirement phase income stream, like an account-based pension.

• From 1 July 2025, the general transfer balance cap increases from $1.9 million to $2.0 million.
• If you start your first retirement income stream in FY26, your personal cap will be $2.0 million.
• If you have already started a retirement income stream, your personal cap will increase proportionally based on how much of your cap you have used in the past.

Check your personal cap on MyGov or speak to a financial adviser if you are unsure.

9. Minimum Pension Drawdown

A minimum pension amount must be paid from retirement income accounts each financial year. For example, if a 68-year-old has a 5% minimum drawdown rate and a $400,000 pension balance on 1 July 2025, they must withdraw at least $20,000 during FY26.

While large funds often automate this, those with a self-managed super fund must be vigilant. Failure to meet the minimum can cause your pension to lose its tax-free status.

10. Defined Benefit Income Cap

For those with a defined benefit income stream, the defined benefit income cap increases from $118,750 to $125,000 on 1 July 2025.

11. Government Co-Contribution

The government co-contribution scheme helps eligible individuals boost their super. In FY26, the income thresholds have increased, meaning more people can benefit.

• Maximum Benefit: $500.
• Eligibility: Make a non-concessional contribution of $1,000 or more while your income is under the lower threshold of $47,488.
• Tapering: The co-contribution amount gradually reduces and cuts out completely once your income reaches the higher threshold of $62,488.

You can estimate your entitlement on the ATO's super co-contribution calculator.

12. Division 296 Tax (The "$3m Super Tax")

The government has proposed a new tax, known as the Division 296 tax, targeting individuals with super balances over $3 million. If passed, it would apply an additional 15% tax on earnings related to the balance exceeding $3 million. You can track the progress of this legislation on the Parliament of Australia website.

• The proposed start date is 1 July 2025.
• However, the bill has not yet been introduced into parliament, so it is unclear if or when it will pass, what its final details will be, or if the start date will be changed.