If you contribute more than $32,500 in concessional (before-tax) contributions or $130,000 in non-concessional (after-tax) contributions in 2026–27, the excess is taxed on top of what the fund already paid — and if you don't elect to release it from super, the combined tax on excess concessional contributions can reach as high as 94%.
Employer Super Guarantee contributions now sit at 12% of your salary. Combine that with salary sacrifice, a pay rise, or a bonus, and higher-income earners can breach the $32,500 concessional cap without realising — especially if they've also changed jobs mid-year and received SG from multiple employers.
The Two Caps for 2026–27
There are two separate contribution caps trustees and members need to track each financial year:
- Concessional cap: $32,500 per year. This covers employer Super Guarantee contributions, salary sacrifice, and personal contributions you claim a tax deduction for — all combined, not separately.
- Non-concessional cap: $130,000 per year, or up to $390,000 over three years via the bring-forward rule, available if your total super balance was under $1.84 million as at 30 June 2026. The bring-forward rule lets you use up to three years' worth of non-concessional cap space in a single year, which is commonly used after receiving a large lump sum such as an inheritance or property sale proceeds.
Excess Concessional Contributions
If you exceed the $32,500 concessional cap, the excess amount is added to your assessable income for the year and taxed at your marginal tax rate, rather than the concessional 15% rate the fund already applied. You do get a 15% tax offset to account for the tax the fund already paid on that excess amount, so you're not taxed twice on the full amount from scratch.
However, if you don't make an election to release the excess amount from your super fund, the practical effect — once you add your marginal rate, the Medicare levy, and the interest charge the ATO applies for the period the excess sat untaxed at your full rate — can push the total effective tax on that excess contribution as high as 94%. This is why almost every trustee elects to release the excess when given the option.
Excess Non-Concessional Contributions
If you exceed the $130,000 non-concessional cap (or your relevant bring-forward amount), the fund allows you to withdraw the excess contributions plus any associated earnings on that excess. In that case, only the earnings portion is taxed — at your marginal rate, less a 15% tax offset.
If you choose not to withdraw the excess, a flat and punitive 47% tax applies to the entire excess non-concessional amount — not just the earnings, the whole excess contribution. This is a significantly worse outcome than withdrawing it, so trustees facing an excess non-concessional determination should almost always elect to release the money.
Cap Comparison Table
| Cap Type | 2026–27 Limit | If Exceeded (and withdrawn) | If Exceeded (not withdrawn) |
|---|---|---|---|
| Concessional | $32,500/year | Marginal rate on excess, less 15% offset | Effective rate up to 94% |
| Non-concessional | $130,000/year (or $390,000 over 3 years, if balance under $1.84M) | Marginal rate on earnings only, less 15% offset | Flat 47% on entire excess |
Why This Happens So Easily
The concessional cap in particular catches people by surprise. Employer SG contributions at 12% of salary already use up a large chunk of the $32,500 cap on their own for higher-income earners, and salary sacrifice arrangements set up earlier in the year (or in a previous year) can push someone over the line after a pay rise or bonus, since the salary sacrifice percentage or dollar amount often isn't automatically adjusted.
Changing jobs partway through the financial year is another common trap — if you receive SG contributions from two different employers in the same year, it's easy to lose track of the combined total against a single annual cap, especially with variable pay or multiple part-time roles.
How to Avoid Exceeding a Cap
- Track your contributions throughout the financial year, not just at tax time — don't wait for your fund's annual statement to check your position
- Use the ATO's contribution reporting tools via myGov, which show concessional and non-concessional contributions reported by your fund(s) close to real time
- Coordinate with your employer or payroll team on salary sacrifice amounts, particularly straight after a pay rise, bonus, or when starting a new job
- Be careful applying the bring-forward rule if your total super balance is close to the $1.84 million or $2.1 million thresholds, since eligibility and the exact bring-forward amount depend on your balance at 30 June of the prior year
What to Do If You've Already Exceeded a Cap
In most cases you don't need to self-report immediately — the ATO automatically identifies excess contributions once your super fund(s) report contribution data for the year, then issues an excess contributions determination. For excess concessional contributions, you can elect to release up to 85% of the excess amount from your super fund to help cover the resulting tax bill, which is a common and sensible option to avoid needing to fund the tax from other sources.
Frequently Asked Questions
What is the concessional super contributions cap for 2026-27?
$32,500 per year, covering employer SG, salary sacrifice, and personal deductible contributions combined.
What is the non-concessional super contributions cap for 2026-27?
$130,000 per year, or up to $390,000 over three years via bring-forward if your total super balance was under $1.84 million at 30 June 2026.
How much tax do you pay on excess concessional contributions?
Taxed at your marginal rate with a 15% offset; if not released from super, the effective rate can reach up to 94%.
How much tax applies to excess non-concessional contributions?
If withdrawn, only the earnings are taxed at your marginal rate less 15%. If not withdrawn, a flat 47% applies to the whole excess.
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