You'd like to put a bit more into super this year. Maybe there's a bonus coming, maybe the mortgage is finally under control, maybe you've just looked at your balance and felt that quiet jolt so many people feel in their 50s. But somewhere you've heard that if you put in too much, the tax office hits you with a penalty — and so you do nothing, because nobody ever explained where the line actually is.
Here's the good news: the line is clearly drawn, it moved in your favour on 1 July, and the rules around it are more forgiving than the horror stories suggest.
Two caps, two kinds of money
The system draws one big distinction: money that gets a tax break on the way in, and money that doesn't.
Concessional contributions are the before-tax kind. They include the compulsory superannuation guarantee (SG) your employer pays, anything you salary sacrifice, and personal contributions you claim as a tax deduction. Inside the fund these are taxed at 15 per cent — for most middle-income earners, far less than the tax on the same dollars taken as salary. That discount is why there's a cap.
Non-concessional contributions are the after-tax kind — money you've already paid tax on, perhaps from savings, an inheritance or the sale of an asset. There's no tax on the way into the fund, and the cap is much higher.
This year's numbers
For the 2026–27 financial year, the Australian Taxation Office (ATO) has confirmed the concessional cap is $32,500, up from $30,000 last year. The non-concessional cap rose with it to $130,000.
The crucial thing people miss is that the concessional cap includes your employer's SG payments. With SG now at 12 per cent, someone earning $110,000 gets about $13,200 of employer super — leaving roughly $19,300 of concessional room for salary sacrifice or a personal deductible contribution. You don't have to use it all. Even an extra $100 a fortnight uses barely a tenth of it.
The catch-up rules built for people your age
Two rules turn the caps from a ceiling into an opportunity, and both suit people in their 40s and 50s.
The first is the carry-forward rule. If your total super balance was under $500,000 at 30 June last year, you can use any concessional cap space you didn't use in the previous five financial years. Years of part-time work, a career break or a stretch where only the SG went in aren't wasted — that unused space is sitting there waiting. You can see your exact carry-forward amount by logging in to myGov and opening the ATO's super section. For someone who receives an inheritance or a redundancy payout at 55, this rule can shelter a large slice of it from tax in a single year.
The second is the bring-forward rule for after-tax money. If you're under 75, you can pull forward up to three years of non-concessional caps and contribute as much as $390,000 in one hit, provided your total super balance is under the thresholds (the full three years is available if your balance is below $1.84 million — which covers the vast majority of us).
What actually happens if you go over
This is where the fear usually outruns the facts. Going over the concessional cap is not a fine — the excess is simply added to your taxable income and taxed at your marginal rate, with a 15 per cent offset for the tax the fund already paid. In other words, you end up roughly where you'd have been if you'd never made the contribution. You can also withdraw most of the excess to pay the bill. Annoying, yes; ruinous, no.
Exceeding the non-concessional cap gives you a choice: take the excess (plus its earnings) back out, with the earnings taxed at your marginal rate less an offset, or leave it in the fund and pay the top rate of 47 per cent on the excess. Almost everyone should take the first option — and the ATO writes to you with the election, so it's hard to miss.
The genuine traps are quieter ones. A contribution counts in the year your fund receives it, so a payment made in the last days of June can land in July and count against next year's cap. And if your income plus concessional contributions top $250,000, an extra 15 per cent contributions tax — known as Division 293 — applies to some or all of them.
If you're behind — and what to watch
If you're reading this thinking you've never once come near the cap, you're in the majority, and the caps are honestly the least of your worries — the bigger risk is contributing too little, not too much. Start with an amount that doesn't hurt, direct it to salary sacrifice or a deductible contribution, and let the 15 per cent tax rate do its quiet work for a decade or more.
Three things to check before you act. First, your payslip: confirm what SG you're actually receiving, because that sets your remaining room. Second, myGov: your carry-forward balance and total super balance are both there, and they determine which rules you can use. Third, timing: give any June contribution at least a week to land. As Noel Whittaker has said for forty years, the best strategies are simple ones executed early — the caps reset every 1 July, and room you don't use (beyond the five-year window) is gone for good.
Want the full picture — including salary sacrifice, spouse contributions, the co-contribution and how it all fits together? Super Made Simple (7th Edition) is updated for the current financial year — buy direct from the author for $16.95, delivered instantly in PDF and EPUB.
This article is general information only and doesn't take account of your personal circumstances. Figures are current at time of writing and change each financial year. Consider seeking advice before acting.