May 13, 2026 Andrew Low

Superannuation measures

Tax on large super balances

Originally announced in the 2023-24 Federal Budget and finally legislated earlier this year, a new Division 296 tax will be applied to superannuation earnings of members who have more than $3.0 million accumulated within the superannuation environment.

The new tax will be applied at the rate of 15% to the extent a member has a total super balance in excess of $3.0 million, and a further 10% to the extent their total super balance in excess of $10.0 million. The tax is applied to an amount of earnings in a superannuation fund that the fund has attributed to each particular member of that fund, with that attribution to be done on a fair and reasonable basis.

Pay-day super

Originally announced in the 2023-24 Federal Budget and now legislated, from 1 July 2026 a new regime (referred to as pay-day super) will commence. Under these arrangements, employers will be required to pay superannuation guarantee amounts for their employees on the same day as they pay their salary and wages.

Payments are required to be received by the relevant superannuation fund within 7 business days, and superannuation funds must ensure payments are allocated to the member’s account within 3 days of receipt.

The benefit for employees is that superannuation payments will be made to their accounts on a more frequent basis, allowing for more to accumulate in the tax effective environment of superannuation at a faster rate.

Threshold and cap indexation

As a result of high inflation and movements in average weekly earnings over the last 12 months, a number of superannuation caps and thresholds will index from 1 July 2026, opening up potential opportunities to accumulate more wealth inside super and start retirement income streams with higher balances. These include the following:

– Indexation of the general transfer balance from $2.0 million to $2.1 million from 1 July 2026. The transfer balance cap sets a limit on the level of accumulated superannuation savings that can be transferred into retirement income streams within superannuation. 3

– Indexation of the total super balance threshold from $2.0 million to $2.1 million from 1 July 2026. This threshold is relevant for determining whether you can make non-concessional contributions to super, and also whether you are able to utilise the bring forward provisions to contribute up to three years of contributions within a single year.

– The concessional contribution cap will index on 1 July 2026 from $30,000 per annum to $32,500 per annum, which may allow you to revisit superannuation strategies, such as salary sacrificing, to determine if you can make further contributions into the superannuation system.

– The non-concessional contribution cap will index on 1 July 2026 from $120,000 per annum to $130,000 per annum. When combined with indexation of the total super balance threshold, this will impact on how much you can contribute to super from after-tax monies from 1 July 2026.