Key Takeaways:
- What it is: Super contributions tax is the tax your super fund pays on contributions going into your super account. Before-tax (concessional) contributions are taxed at 15%, and after-tax contributions are not taxed again.
- How much in 2026-27: The concessional contribution cap is $32,500, and the non-concessional cap is $130,000. Exceeding either cap can mean extra tax.
- How to reduce it: Salary sacrifice, claiming a tax deduction for personal contributions and using unused concessional cap amounts can help you pay less tax.
- Who pays more: If your income plus concessional contributions exceeds $250,000, Division 293 tax adds another 15% on some or all of those contributions.
Super contributions tax is the tax your super fund pays on money going into your superannuation, and it is one of the most effective ways to build retirement savings while managing your income tax. For most Australians, before-tax contributions are taxed at 15%, while after-tax contributions are not taxed again.
This article will explain what super contributions tax is, how much it is in 2026, the caps that apply, and how to reduce the tax you pay.
What is Super Contributions Tax?
Super contributions tax is the tax your super fund deducts from certain contributions when they arrive in your super account. It applies to concessional (before-tax) contributions, such as employer super guarantee payments and salary sacrifice. The fund pays it to the Australian Taxation Office (ATO), so you don’t pay it directly.
Superannuation contributions fall into two main groups:
- Concessional contributions: These come from your before-tax income and include super guarantee, salary sacrifice and personal contributions you claim as a tax deduction.
- Non-concessional contributions: These come from your after-tax income and include personal contributions you don’t claim a deduction for.
The type of contribution decides the tax treatment, and each type counts towards a different contribution cap.
How Much Tax Do You Pay on Super Contributions?
Most people pay 15% tax on concessional contributions and nothing on non-concessional contributions. High-income earners may pay 30% on some concessional contributions because of Division 293 tax. Contributions above the annual cap can also be taxed at your marginal tax rate or higher.
| Type of contribution | Examples | Tax on super contributions |
|---|---|---|
| Concessional (before-tax) | Employer super guarantee, salary sacrifice, deductible personal contributions | 15% (30% if Division 293 applies) |
| Non-concessional (after-tax) | Personal after-tax contributions, spouse contributions | 0% (already taxed as income) |
| Government co-contribution | ATO co-contribution for eligible low-income earners | 0% |
| Excess concessional | Above the concessional cap | Taxed at your marginal tax rate, with a 15% tax offset |
| Excess non-concessional | Above the non-concessional cap | Release the excess, or pay 47% |
Tax on Pre-Tax Super Contributions (Concessional Contributions):
Concessional contributions are usually taxed at 15% when they reach your super fund. For many workers this is lower than their income tax rate, which is why before-tax contributions can reduce the tax you pay.
Here are the 2026-27 resident income tax rates for comparison:
| Taxable income | Income tax rate |
|---|---|
| $0 – $18,200 | Nil |
| $18,201 – $45,000 | 15% |
| $45,001 – $135,000 | 30% |
| $135,001 – $190,000 | 37% |
| $190,001 and over | 45% |
The Medicare levy of 2% is generally added to these rates.
If you don’t give your tax file number to your super fund, extra tax can apply to your concessional contributions. The ATO can sometimes refund it once your fund has your tax file number.
Tax on Post-Tax Super Contributions (Non-Concessional Contributions):
Non-concessional contributions are contributions made from money you have already paid income tax on. Your super fund doesn’t tax them again when they arrive. They count towards your non-concessional cap instead of your concessional cap.
When Are Super Contributions Tax-Free?
Super contributions are tax-free in your fund when they are after-tax contributions within your cap. Government co-contributions are also not taxed. Downsizer contributions from the sale of your home are tax-free too, and they sit outside the non-concessional cap.
Common tax-free contributions include:
- After-tax contributions within your non-concessional cap
- Government super co-contributions
- Downsizer contributions (for eligible people aged 55 and over)
- Spouse contributions made from your spouse’s after-tax income
Super Contribution Caps and Limits
A contribution cap is the most you can add to super each financial year before extra tax applies. There are separate caps for concessional and non-concessional contributions. The ATO indexes both caps and applies them across all your super funds combined.
| 2026-27 financial year | Amount |
|---|---|
| Concessional contribution cap | $32,500 |
| Non-concessional contribution cap | $130,000 |
| Non-concessional bring-forward (maximum) | $390,000 |
| General transfer balance cap | $2.1 million |
| Carry-forward eligibility (total super balance below) | $500,000 |
Concessional Contribution Cap and Unused Concessional Contributions:
The concessional contribution cap is $32,500 for the 2026-27 financial year. It includes your employer’s super guarantee payments, salary sacrifice contributions and personal contributions you claim as a tax deduction.
You may be able to use unused concessional contributions from previous years. Under the carry forward rules:
- Your total super balance on 30 June of the previous financial year must be below $500,000.
- You can carry forward unused cap amounts for up to five years.
- You must use the oldest unused amounts first.
For example, if you contributed less than your cap in earlier years, you could make extra contributions this year and claim a larger tax deduction.
Non-Concessional Contribution Cap and Bring-Forward Rules:
The non-concessional cap is $130,000 for 2026-27. You may be able to bring forward up to three years of the cap, which allows up to $390,000 in one year. How much you can contribute depends on your total super balance on 30 June of the previous financial year.
| Total super balance on 30 June 2026 | Non-concessional cap available |
|---|---|
| Less than $1.84 million | Up to $390,000 (3-year bring-forward) |
| $1.84 million to less than $1.97 million | Up to $260,000 (2-year bring-forward) |
| $1.97 million to less than $2.1 million | $130,000 (no bring-forward) |
| $2.1 million or more | Nil |
Your total super balance must be less than the general transfer balance cap of $2.1 million to make non-concessional contributions.
What Happens When You Exceed Your Contribution Caps?
If you exceed a contribution cap, the excess is taxed differently. Excess concessional contributions are included in your assessable income and taxed at your marginal tax rate. Excess non-concessional contributions must be released from your super, or they are taxed at the top rate. The ATO will issue a determination explaining your options.
How Are Different Types of Super Contributions Taxed?
The tax treatment depends on the type of contribution and who makes it. Generally, concessional contributions are taxed at 15% in the super fund, while non-concessional and government contributions are not. The sections below break down each type.
Employer Super Guarantee Contributions:
Super guarantee contributions are payments your employer must make to your super fund. The rate is 12% of your ordinary time earnings, and your employer pays it on top of your salary. These are concessional contributions, so contributions are taxed at 15% in your fund.
Your employer pays super quarterly. However, from 1 July 2026, employers must pay super guarantee at the same time as wages under the “Payday Super” rules. Super guarantee counts towards your concessional contribution cap, so check it if you also make extra contributions.
Salary Sacrifice and Personal Super Contributions:
Salary sacrifice contributions are made from your before-tax income. You ask your employer to pay part of your salary into super, and these contributions are taxed at 15% instead of your marginal tax rate.
For example, say you earn $100,000 and your marginal tax rate is 30% plus the 2% Medicare levy. If you salary sacrifice $10,000, you pay 15% tax ($1,500) in the fund instead of 32% ($3,200) as income tax. That is a saving of $1,700.
Personal contributions work differently. You can treat them as after-tax contributions (no tax deduction) or claim a tax deduction and make them concessional.
Government Super Contributions and Co-Contributions:
Government co-contributions are available if you make after-tax contributions and have a low or middle income. For 2026-27, the government can match 50 cents for every $1 you contribute, up to $500.
- You receive the full amount if your total income is $49,293 or less.
- The amount reduces gradually and stops at $64,293.
- At least 10% of your income must come from employment or business.
Government contributions are not taxed in your super fund.
Are Super Contributions Tax Deductible?
Some super contributions are tax deductible, but not all of them. Employer contributions and salary sacrifice are already made from before-tax income, so you can’t claim them again. Personal contributions can be a tax deduction if you meet the ATO’s requirements and submit the right notice to your fund.
Tax Deductions for Personal Super Contributions:
You can claim a tax deduction for personal contributions to your super fund and reduce your taxable income. To claim as a tax deduction, follow these steps:
- Make the personal contribution to your super account before 30 June.
- Lodge a notice of intent to claim a deduction with your super fund.
- Get written acknowledgement from your fund before you lodge your tax return.
- Claim the deduction in your tax return.
The contributions you claim count towards your concessional contribution cap, and your super fund taxes them at 15%. If you earn above the 30% tax bracket, this can help you pay less tax overall.
Tax Treatment of After-Tax Super Contributions:
After-tax contributions are not tax deductible, and your super fund doesn’t tax them. Because you’ve already paid income tax on the money, you don’t pay tax on it again when it reaches your super balance. These are non-concessional super contributions, and they count towards the non-concessional cap.
If you are using the first home super saver scheme, you can generally withdraw up to 85% of your concessional contributions, plus 100% of your non-concessional contributions, up to the scheme’s limits.
What Is Division 293 Tax on Super Contributions?
Division 293 tax is an extra 15% tax on concessional contributions for high-income earners. It means contributions are taxed at 30% instead of 15%. The ATO assesses it, and you can pay the tax from your own money or ask your super fund to release it.
Who Has to Pay Division 293 Tax?
You pay Division 293 tax if your income and your concessional contributions together exceed $250,000 in a financial year. Income for this purpose includes your taxable income and certain other amounts, such as reportable fringe benefits and net investment losses.
How Is Division 293 Tax Calculated?
Division 293 tax applies to the lesser of your concessional contributions and the amount by which your combined total exceeds $250,000. The tax is 15% of that amount.
| Item | Amount |
|---|---|
| Income for Division 293 | $230,000 |
| Concessional contributions | $32,500 |
| Combined total | $262,500 |
| Amount over $250,000 | $12,500 |
| Division 293 tax (15%) | $1,875 |
The ATO will send you a Division 293 assessment after you lodge your tax return.
What Is Excess Contributions Tax?
Excess contributions tax applies when you go over your concessional or non-concessional cap. Today the tax works through your income tax return, not as a separate charge. The ATO will tell you how much you’ve exceeded the cap and what your options are.
Exceeding the Concessional Contribution Cap:
Excess concessional contributions are added to your total income and taxed at your marginal tax rate. You also get a 15% tax offset, because your fund has already paid contributions tax. You can choose to release up to 85% of your excess concessional contributions from your super fund to help pay your income tax liability. Any amount you leave in super still counts towards your non-concessional cap.
Exceeding the Non-Concessional Contribution Cap:
If you exceed the non-concessional cap, the ATO will send a determination. You can release your excess contributions, plus the associated earnings, from your super. The earnings are taxed at your marginal tax rate, with a 15% offset. If you don’t release the excess, it is taxed at 47%.
Super Tax Offsets and Government Contributions
A tax offset reduces the tax you pay dollar for dollar, and several super tax offsets are designed to help lower-income households. The two main ones are the Low Income Superannuation Tax Offset (LISTO) and the spouse contribution tax offset. Both are separate from the co-contribution.
Low Income Superannuation Tax Offset (LISTO):
LISTO is a government payment into your super account equal to 15% of your concessional contributions, up to $500. To be eligible:
- Your adjusted taxable income must be $37,000 or less.
- You or your employer must have made concessional contributions.
- You must not have held a temporary resident visa (with limited exceptions).
The ATO pays LISTO automatically based on information from your super fund, so you don’t need to apply.
Spouse Contribution Tax Offset:
If you make an after-tax contribution to your spouse’s super account, you may claim a tax offset of up to $540 (18% of up to $3,000). To qualify:
- Your spouse’s income must be below $40,000.
- You get the full offset if your spouse earns $37,000 or less.
- Your spouse must not have exceeded their non-concessional cap, and their total super balance must be below the general transfer balance cap on the previous 30 June.
How Are Super Income Streams Taxed?
Tax on a super income stream depends on your age and the type of super fund. If you are 60 or over and receive an income stream from a taxed fund, the payments are generally tax-free. If you are under 60, the taxable component is added to your income and taxed at your marginal tax rate, with a 15% offset in some cases.
Earnings on money supporting an income stream in the retirement phase are also tax-free, up to the transfer balance cap of $2.1 million. Lump sums received between preservation age and 59 are taxed at a concessional rate up to the low rate cap of $260,000 for 2026-27.
How to Check and Manage Your Super Contributions Tax
To manage your super contributions tax, check your contributions each year, compare them with the caps and plan any extra contributions before 30 June. You can see your contribution history and total super balance online.
Follow these steps:
- Log in to ATO online services through myGov. This shows your concessional and non-concessional contributions, your total super balance and any unused cap amounts.
- Check your super fund statements. Information from your super fund will confirm what your employer paid and when.
- Review your total super balance. Your total super balance on 30 June decides how much you can contribute in the next financial year.
- Plan before 30 June. Your fund must receive contributions by 30 June to count in that financial year.
- Consider your personal circumstances. Think about your income, age and goals, and consider speaking with a registered financial adviser or tax professional.
FAQs
What Is Contributions Tax on Super?
Contributions tax on super is a 15% tax your super fund pays on concessional (before-tax) contributions, such as employer super guarantee and salary sacrifice. High-income earners may pay an extra 15% under Division 293. After-tax contributions are not subject to contributions tax.
Are Super Contributions Tax Deductible?
Personal super contributions are tax deductible if you lodge a valid notice of intent and your fund acknowledges it. Employer and salary sacrifice contributions are not deductible because they are made from before-tax income. Deductible contributions count towards your concessional contribution cap.
Do You Pay Tax on Super Contributions After Tax?
No. After-tax contributions are made from income you have already paid tax on, so your super fund does not tax them again. They count towards the non-concessional cap of $130,000 for 2026-27 instead. Going over the cap can result in extra tax.
Can You Make Tax-Free Super Contributions?
Yes. After-tax contributions within your non-concessional cap, government co-contributions and downsizer contributions are all tax-free when they enter your fund. You must still meet eligibility rules and stay within the contribution limit that applies to your situation.
How Do You Avoid Exceeding Your Super Contribution Cap?
To avoid exceeding your cap, track your employer contributions, salary sacrifice and personal deductible contributions across all your super funds. Check your total super balance on 30 June, and review your contributions in ATO online services before making extra contributions.
Conclusion
Super contributions tax is generally simple: before-tax contributions are taxed at 15%, and after-tax contributions are not taxed again. For 2026-27, the concessional cap is $32,500, and the non-concessional cap is $130,000, with bring-forward and carry-forward rules that may let you contribute more.
If you earn a high income, remember that Division 293 can double the tax on some contributions. By checking your caps, tracking your total super balance and using strategies like salary sacrifice or a tax deduction, you can build your super while paying less tax.