With 30 June less than a month away, the pressure is on to finalise contribution strategies before the window closes. This year there is more to consider than usual; Payday Super commences on 1 July, Division 296 is on the legislative horizon, and several caps and thresholds have shifted or will shift on 1 July. The technical summary below covers what professionals and superannuation trustees need to know and act on before year-end.
1. Concessional Contributions Cap: $30,000
The concessional contributions cap remains at $30,000 for FY2025-26, covering employer SG contributions, salary sacrifice, and personal deductible contributions. The SG rate increased to 12% from 1 July 2025. With the rate now at its legislated final level, monitoring employer contributions is essential to avoid unintentional excess, particularly for higher-income employees where SG alone may consume a significant portion of the cap.
Clients with irregular income or the self-employed may benefit from a lump sum personal deductible contribution toward year-end. The Notice of Intent (s290-170) form must be lodged with and acknowledged by the Fund trustee before personal income tax returns are lodged, pensions commenced, or any withdrawals made.
Forward planning note: The concessional contributions cap will increase to $32,500 from 1 July 2026, with the non-concessional cap rising to $130,000. Clients who are weighing the timing of large contributions should factor this in.
2. Carry-Forward Concessional Contributions
Clients with total super balances under $500,000 at 30 June 2025 can utilise unused concessional cap amounts from the previous five years. A member who has not used any amount of the concessional contributions cap for the last five financial years could have a concessional contributions cap of up to $167,500 in 2025-26.
This is particularly valuable for clients with lumpy income, capital gains, or one-off asset disposal events in this financial year. Note that unused amounts from FY2020-21 will permanently expire at 30 June 2026. This is a hard deadline with no extension.
3. Non-Concessional Contributions (NCC) Cap: $120,000 (or $360,000 bring-forward)
The non-concessional contributions cap for 2025-26 is $120,000, or up to $360,000 over three years under the bring-forward rule. Clients must be under 75 to trigger bring-forward.
The Total Super Balance (TSB) thresholds have shifted this year due to the increase in the general transfer balance cap to $2 million. The full three-year bring-forward arrangement is available to those whose total super balance is less than $1.76 million (general transfer balance cap less two times the non-concessional contributions cap). A client’s NCC cap is nil if their total super balance is equal to or more than the general transfer balance cap of $2 million.
A member needs to confirm they haven’t already triggered the bring-forward rule in earlier years and also check their TSB at 30 June 2025 carefully. Contributions must be received by the Fund before 30 June to count for this financial year.
Forward planning note: Members whose TSB currently sits between $2.0 million and $2.1 million are ineligible to make NCCs this year, but may regain eligibility in FY2026-27. On 1 July 2026 the total super balance will increase from $2.0 million to $2.1 million, potentially restoring NCC eligibility for those in this band.
4. Downsizer Contributions: Still an Option From Age 55
Members aged 55 or older can contribute up to $300,000 from the sale proceeds of their main residence, subject to eligibility criteria. This contribution sits outside the NCC cap and remains a powerful tool for boosting retirement savings, particularly relevant given the NCC threshold changes noted above.
Downsizer contributions must be made within 90 days of settlement and require the appropriate ATO form to be submitted to the Fund.
5. Timing and Clearing House Delays
Contributions count in the year they are received by the Fund – not when the payment is made. For clients using commercial clearing houses, contributions should be submitted well before 20 June to allow sufficient processing time.
This is the final year that the ATO’s Small Business Superannuation Clearing House (SBSCH) is operational. The SBSCH will close from 1 July 2026 and was not going to be fit for purpose for a Payday Super environment. Affected employers – estimated at around 200,000 – must transition to a SuperStream-compliant alternative before then.
6. NEW: Payday Super – Commencing 1 July 2026
This is the single most significant change for employers and warrants immediate attention.
From 1 July 2026, employers will need to pay superannuation contributions at the same time as their employees’ wages, with contributions required to reach the employee’s nominated fund within seven business days of each payday. This replaces the current quarterly payment system entirely.
Key operational implications:
The ATO has released PCG 2026/1, setting out a risk-based compliance approach for the first year of the new regime (1 July 2026 to 30 June 2027). Businesses should act now to review payroll systems, clearing house arrangements, onboarding processes, and cash flow planning.
Funds must also receive and allocate employer contributions to member accounts, or return those contributions, within three business days of receipt.
A key technical change under Payday Super is the introduction of “qualifying earnings” (QE), which replaces ordinary time earnings (OTE) as the basis for calculating SG contributions. The maximum contributions base also shifts from a quarterly figure to an annual one of $250,000 from 1 July 2026.
Business owners or those who employ staff should be prompted to act before 30 June – not after.
7. NEW: Division 296 Tax – What High-Balance Members Need to Know
Division 296 is a new additional tax levied on individuals with high superannuation balances. While we still await final regulations, the legislation has been passed.
The legislation will commence from 1 July 2026, with the first measurement and assessment of Division 296 tax occurring from 30 June 2027. For individuals with a total superannuation balance greater than $3 million, Division 296 tax will be assessed at 15% of attributable earnings on the portion above $3 million. For individuals with a TSB greater than $10 million, an additional 10% applies to earnings above that threshold.
A transitional first-year calculation uses the TSB assessment at 30 June 2027. This will enable individuals to withdraw money from superannuation before that date and reduce their TSB below $3 million if they do not wish to incur Division 296 tax.
In the meantime, it is prudent to:
- Identify clients whose total super balances are approaching the thresholds
- Focus on the accuracy and supportability of asset valuations at 30 June 2026
- Begin considering whether the CGT cost base adjustment may be appropriate for SMSF clients
- Factor Division 296 into broader retirement, estate planning, and investment strategies.
The valuation of superannuation interests at 30 June 2026 will be a critical reference point going forward, particularly for SMSFs holding long‑term growth assets.
8. Total Super Balance and Transfer Balance Cap Reporting
The total super balance and general transfer balance cap will increase from $2 million in FY2025-26 to $2.1 million on 1 July 2026. This will have flow-on effects for NCC eligibility and spouse contribution tax offsets. Superannuation members approaching or exceeding this threshold need to be aware, to reduce or avoid excess contributions tax consequences and possible reduced access to concessions including the government co-contribution and spouse contribution offset.
Do you have questions about how these changes affect your super?
Our team of SMSF experts is here to help you gain strategic insights, avoid pitfalls, find answers to essential questions, and stay compliant and confident. Book a consultation today or call us on 1300 023 170.
Disclaimer: General information only. SuperConcepts does not provide financial product advice. Consider your circumstances and seek licensed advice where appropriate.