By Philippa Billings, Chief Advice Officer, Otivo
The word cap suggests a single ceiling, but super has two, and they work by completely different logic. One governs money going in before tax, the other money going in after. Miss the distinction and it's easy to either leave room unused or sail past a limit without noticing. Add the carry-forward and bring-forward rules, and the annual number is rarely the whole story. Here's how the caps actually work.
Quick answer
Super contribution caps limit how much you can add each year before extra tax applies. There are two. The concessional cap covers before-tax contributions and is $32,500 for 2026-27. The non-concessional cap covers after-tax contributions and is $130,000 for 2026-27. Both are set by the ATO and indexed over time.
What are the two types of super contribution caps?
Super splits contributions into two systems, each with its own cap. Concessional contributions are made from before-tax money and include your employer's super guarantee, salary sacrifice, and personal contributions you claim a tax deduction for. Non-concessional contributions are made from after-tax money and aren't claimed as a deduction. Keeping the two straight matters, because they have separate limits, separate rules for going over, and separate ways to contribute more than the annual figure.
How does the concessional contributions cap work?
The concessional cap for 2026-27 is $32,500, and it's a single combined limit. Your employer's super guarantee, any salary sacrifice, and any personal deductible contributions all count towards that same $32,500 together, not as separate allowances. The cap is indexed to average weekly ordinary time earnings and steps up in $2,500 increments, which is why it rose from $30,000 to $32,500 for 2026-27. For most people the practical figure to watch is whatever room is left after their employer's super guarantee is counted.
How does carry-forward let you contribute more?
If you haven't used your full concessional cap in recent years, the carry-forward rules can let you contribute more than the annual cap in a later year. It helps to keep the mechanics and the eligibility separate, because they're two different things.
The mechanics work like this:
- Carry-forward has been available since 1 July 2018.
- Unused concessional cap amounts can be carried forward for up to five financial years.
- Unused amounts are used oldest first and expire after five years.
Eligibility requires all three of the following:
- Your total super balance was below $500,000 on 30 June of the prior financial year.
- You have unused concessional cap space in one or more of the previous five financial years.
- You're eligible to make super contributions, which generally means being under age 75.
Meet all three and your effective concessional cap in a given year can be well above $32,500.
How does the non-concessional contributions cap work?
The non-concessional cap for 2026-27 is $130,000. Eligible people under 75 may be able to use the bring-forward arrangement, which allows up to three years of the cap to be used at once, meaning as much as $390,000 in a single year, with the exact amount depending on your total super balance. If your total super balance was at or above the general transfer balance cap of $2.1 million on 30 June of the prior year, your non-concessional cap for the current year is nil.
What happens if you exceed a cap?
The two caps handle excess amounts differently. Excess concessional contributions are added to your assessable income and taxed at your marginal rate, with a 15% offset for the tax the fund already paid, plus an excess concessional contributions charge, and you can elect to release up to 85% of the excess from your fund. Excess non-concessional contributions are treated separately. You can elect to withdraw them along with associated earnings, and if you don't, the excess can be taxed at the top rate of 47%. It's worth noting that the 47% figure applies to excess non-concessional contributions, not concessional ones.
There's also a threshold for high earners. Under Division 293, individuals whose combined income and concessional contributions exceed $250,000 in a year pay an extra 15% on the concessional contributions above that threshold, taking the tax on those contributions to 30%.
Frequently asked questions
What's the difference between concessional and non-concessional caps?
The concessional cap covers before-tax contributions such as employer super guarantee, salary sacrifice and personal deductible contributions. The non-concessional cap covers after-tax contributions you don't claim a deduction for. Each has its own limit and its own rules.
Do employer contributions count towards my cap?
Yes. Your employer's compulsory super guarantee counts towards the concessional cap, alongside any salary sacrifice and personal deductible contributions. They share the single $32,500 limit for 2026-27.
Can I contribute more than the cap in one year?
Sometimes. The carry-forward rules can lift your effective concessional cap if you have unused space and meet the eligibility conditions, and the bring-forward rules can do the same for non-concessional contributions if you're eligible.
What happens if I go over?
Excess concessional contributions are taxed at your marginal rate with a 15% offset plus a charge, and up to 85% can be released. Excess non-concessional contributions can be withdrawn with earnings, or taxed at 47% if left in.
Where to from here
The caps reward a bit of planning, especially if you have unused room from earlier years. Otivo, a licensed Australian financial advice platform holding AFSL and Australian Credit Licence No. 485665, offers a salary sacrifice contributions module that works out how much room you have and what adding to super could mean, based on your income, age and household expenses. It takes the rules and makes them personal.
Sources
- Australian Taxation Office — concessional and non-concessional contributions caps, carry-forward and bring-forward rules, Division 293 and excess contributions — ato.gov.au
- ASIC MoneySmart — super contribution caps — moneysmart.gov.au
Disclaimer
The information in this communication is current as at July 2026 and has been prepared by Otivo Pty Ltd ABN 47 602 457 732, AFSL and Australian Credit Licence No. 485665. This content is general information only and has been prepared without taking into account your objectives, financial situation or needs. It is not personal financial or taxation advice and should not be relied on as such. Before acting on any information, you should consider its appropriateness having regard to your personal circumstances. This material must not be reproduced in whole or in part, or posted on any social media platform, without the prior written consent of Otivo Pty Ltd.