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2025-26 super thresholds – key changes and implications

The Australian Bureau of statistics recently released the average weekly ordinary time earnings (AWOTE) and consumer price index (CPI) figures for the quarter ending December 2024. These statistics are used to determine key superannuation rates and thresholds that will apply from 1 July 2025. This article outlines the rates and thresholds that are changing and those that aren’t. It also explains some key considerations and opportunities in the lead up to 30 June 2025 and beyond.

Transfer balance cap

The transfer balance cap limits the amount of superannuation that can be used to start a pension, where the investment returns are generally tax free. The transfer balance cap was introduced from 1 July 2017 at $1.6 million and is indexed periodically to the CPI in $100,000 increments.

From 1 July 2025 the transfer balance cap will increase from $1.9 million to $2.0 million.

Contributions

Some key thresholds that impact contribution planning will increase from 1 July 2025, while others will be unchanged.

Total super balance

The value of the general transfer balance cap is used to determine the total super balance threshold which impacts eligibility for making non-concessional contributions and spouse contributions, as well as receiving Government co-contributions. This will increase to $2 million from 1 July 2025.

When determining eligibility for contributions, the total super balance is measured at the previous 30 June, not at the time a contribution is made.

Concessional contributions

The concessional contributions cap is indexed to AWOTE in $2,500 increments. The concessional contributions cap will remain at $30,000 from 1 July 2025.

This also impacts the concessional contributions that can be made under the five-year carry forward rules by individuals who have a total super balance at the previous 30 June of less than $500,000. The five-year carry forward total super balance threshold is not indexed.

Individuals who have a total super balance on 30 June 2025 below $500,000 will have a concessional contribution cap of up to $137,500 in the 2025-26 financial year. This includes a maximum of $25,000 for 2020-21, $27,500 for 2021-22, 2022-23, 2023-24 and $30,000 for 2024-25. They can also use the concessional contributions cap of $30,000 for 2025-26, bringing the total potential concessional contributions cap in 2025-26 to $167,500.

From 1 July 2025, any unused concessional contributions from 2019-20 will no longer be available to use. This means that 2024-25 is the last year that individuals can use any unused concessional contribution cap from 2019-20.

Non-concessional contributions

The non-concessional contributions cap is calculated as four times the concessional contributions cap. From 1 July 2025 the non-concessional contributions cap will remain at $120,000.

The two- and three-year bring forward limits also remain at $240,000 and $360,000 respectively from 1 July 2025.

The total super balance thresholds for determining eligibility to make non-concessional contributions will change, as outlined in the table below:

Importantly the three-year bring forward maximum contribution is based on the non-concessional contributions cap at the time the three-year bring forward is triggered. There is no benefit from indexation for individuals who have triggered a bring forward in 2023-24.

Example: Shamal triggered the three-year bring forward in 2023-24 by making a $150,000 non-concessional contribution. In 2023-24 the maximum three year bring forward was $330,000. Shamal can contribute a further $180,000 prior to 30 June 2026 (subject to their total super balance). They don’t benefit from indexation of the non-concessional contributions cap during this time.

Thresholds not indexed

The $500,000 threshold for accessing the five-year concessional catch-up contributions is not indexed. In addition, the $300,000 total super balance threshold for determining eligibility for the work test exemption is not indexed.

Historic rates and thresholds

The table below summarises the history of the rates and thresholds:

Superannuation guarantee contributions

Although not subject to indexation, from 1 July 2025 the superannuation guarantee rate is increasing from 11.5% to 12%. Individuals who make personal concessional contributions or have salary sacrifice contributions made by their employer may need to factor the increase into their arrangements.

Summary

The superannuation rules changed dramatically in 2017 and introduced a variety of thresholds that determine eligibility for certain tax concessions and the ability to make contributions. The indexation of the thresholds adds an additional layer of complexity from 1 July 2025. Understanding the additional complexities will assist individuals to maximise the opportunities available within super in both 2024-25 and 2025-26.

 

Julie Steed is a Senior Technical Services Manager at MLC TechConnect. This article provides general information only and does not consider the circumstances of any individual.

 

12 Comments
Richard
May 06, 2025

If I make a $120,000 non-concessional contribution in June 2025, can I then make another $120,000 non-concessional contribution in July 2025 and bring forward 2 years, that is a total of $360,000 in July 2025.
My point is that in one calendar year ... I can do a total of $480,000 ... is this correct?

Mark
May 24, 2025

No, not correct.As I understand it, you can make a $120k in June 25 followed by $120k in Jun 26 and the same in Jun 27 providing you are not already in a bring forward arrangement subject to future rule changes. Alternatively, you can do $120k in Jun 25 followed by $240k in Jun 26 under the bring forward rule or again alternatively you can do the whole $360k in Jun 25 providing you are not already in a bring forward arrangement. Comment is in good faith and without liability, rgds.

OldbutSane
May 24, 2025

Yes, you are correct providing you meet the age and super balance limits. Financial years are used for contributions so you can make a $120k in June 2025 then $360k in July 2025. You then can't make anymore contributions for the next 2 financial years. So, if you do the $480k in July 2025, you can't make further non-concessional contributions until July 2028.

Pife
March 28, 2025

If the $30K limit remains for 2025-2026 it will be less than the required super for high income employees at 12% of the indexed maximum contribution base.

Scott
March 29, 2025

I am interested to know what happens in this instance as well. With the Max Super Contribution base at $65,070 per quarter, this will put the Super Guarantee amt at 12% at $31,233.66, yet there is a $30k limit. This all seems very clunky - in the past they were somewhat synced. What happens in this instance?

Tax Unicorn
May 01, 2025

The max super contribution base is actually lowering back to $62,500 to address your issue @ 12% = $7,500 / qtr.

Navin
March 21, 2025

Navin
It is a system to provide a gravy for the superannuation lawyers, accountants and auditors.

David Ho
March 12, 2025

The whole system is dumb. Only people who do not have a day job can sit down to work out all the rules in the fine print.

Dauf
March 08, 2025

What a stupid system. If they just had a cap on the total amount allowed in super (in accumulation or pension mode) and abolished all other rules…get there however suits you and your career (early, late, steady?)…it would work fine. Just decide what amount is appropriate for the nation to give tax breaks on. Done…simples

And make PPR (house) accessible for pension etc above a certain value

Peter C
March 10, 2025

Agree there should be a limit, (indexed to CPI). Once this limit is reached, any excess should be taxed at tge top marginal rate plus medicare and medicare levy surcharge rate.
Of course any member will be given the option to withdraw or keep the excess in the super fund,

JAMES
March 18, 2025

AGREE WITH YOU

Dudley
March 18, 2025

Better: Abolish Super, abolish Age Pension means tests, abolish inflation tax. Simplerest.

 

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