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Australia Superannuation Guide

the Australian superannuation system for the 2025-26 income year. The guide covers: the Super Guarantee (SG) rate of 11.5% (from 1 July 2025) — the employers must contribute the SG to the employees' superannuation funds at the rate of 11.5% of the ordinary time earnings (the "OTE"); the SG rate is scheduled to increase to 12% from 1 July 2026 (the legislated increase under the "Super Guarantee (Administration) Act 1992"); the SG applies to the employees aged between 18 and 70 years and the employees under 18 years who work more than 30 hours per week; the SG is payable for the employees earning $450 or more per month (the $450 per month threshold was removed from 1 July 2022); the SG is NOT payable for the employees who are paid less than $450 per month if the employee is under 18 years and works less than 30 hours per week; the concessional contribution cap (the "concessional cap") — the concessional (before-tax) contributions are the contributions that are taxed at 15% in the superannuation fund (the "contributions tax"); the concessional cap for the 2025-26 year is $30,000 (the "general concessional cap"); the concessional contributions include: (a) the employer SG contributions, (b) the salary sacrifice contributions, (c) the personal deductible contributions (the contributions for which the taxpayer claims the deduction under the "personal deductible contribution" rules); the excess concessional contributions are taxed at the marginal rate plus the 2% Medicare levy (the "excess concessional contributions charge"); the taxpayer can elect to release the excess contributions from the superannuation fund (the "release authority"); the carry-forward of the unused concessional cap (the "catch-up contributions") — the taxpayer with the total superannuation balance below $500,000 (the "TSB" — the total superannuation balance) as at 30 June of the previous year can carry forward the unused concessional cap amount for up to 5 years; the carry-forward applies from 1 July 2018 (the "unused concessional cap carry-forward"); the non-concessional contribution cap (the "non-concessional cap") — the non-concessional (after-tax) contributions are the contributions that are NOT taxed in the superannuation fund; the non-concessional cap for the 2025-26 year is $120,000 (the "general non-concessional cap"); the non-concessional contributions include: (a) the personal after-tax contributions (the contributions for which the taxpayer does NOT claim the deduction), (b) the spouse contributions (the contributions made to the spouse's superannuation fund), (c) the contributions from the sale of the assets (the "CGT cap contributions" for the small business); the bring-forward rule (the "non-concessional bring-forward") — the taxpayer under 75 years can bring forward 3 years of the non-concessional cap (the "bring-forward of the non-concessional contributions"); the bring-forward amount for the 2025-26 year is $360,000 (3 x $120,000); the bring-forward rule is available if the total superannuation balance is below the "bring-forward threshold" (the threshold is $1.66 million for the 2025-26 year); the First Home Super Saver Scheme (FHSSS) — the FHSSS allows the first home buyers to withdraw the voluntary superannuation contributions (the concessional and the non-concessional contributions) to purchase the first home; the maximum withdrawal amount is $50,000 (the "FHSSS release limit") made up of the contributions and the associated earnings; the withdrawn amount is taxed at the marginal rate minus the 30% tax offset; the Superannuation Guarantee Charge (SGC) — the employer that does NOT pay the SG on time is liable for the "Superannuation Guarantee Charge" (the "SGC") — the SG shortfall plus the interest (the "nominal interest" of 10% per year) plus the administration fee (the "administration fee" of $20 per employee per quarter); the SGC is NOT tax-deductible (the "non-deductibility of the SGC"); the Self-Managed Super Fund (SMSF) — the SMSF is the superannuation fund managed by the members (up to 6 members); the SMSF must comply with the "Superannuation Industry (Supervision) Act 1993" (the "SIS Act"); the SMSF must be audited annually by the approved SMSF auditor (the "SMSF auditor"); the SMSF is subject to the "limited recourse borrowing arrangements" (the "LRBAs") — the SMSF can borrow to acquire the assets (the "instalment warrants") under the strict conditions; the transfer balance cap (the "transfer balance cap") — the transfer balance cap is the limit on the amount that can be transferred from the accumulation phase to the pension phase (the "retirement phase"); the general transfer balance cap for the 2025-26 year is $1.9 million (the "general transfer balance cap"); the income from the assets supporting the pension is tax-free (the "exempt current pension income" — the "ECPI"); the preservation age (the "preservation age") — the preservation age is the age at which the superannuation benefits can be accessed; the preservation age depends on the date of birth: (a) the persons born before 1 July 1964 — the preservation age of 55, (b) the persons born between 1 July 1964 and 30 June 1967 — the preservation age of 56 to 59 (increasing by 1 year every 2 years), (c) the persons born after 30 June 1967 — the preservation age of 60. All amounts in Australian Dollars (AUD). For related reading, see our Personal Tax Guide → and Capital Gains Tax Guide →.

Contribution Caps — 2025-26

  • Concessional cap: $30,000 — The concessional (before-tax) contributions are capped at $30,000 indexed to the Average Weekly Ordinary Time Earnings (the "AWOTE"). The concessional contributions include the SG, the salary sacrifice, and the personal deductible contributions. The contributions are taxed at 15% in the fund (the "contributions tax"). The individuals with the income above $250,000 pay the "Division 293 tax" — the additional 15% on the concessional contributions (the "Division 293 tax" — the total tax of 30% on the concessional contributions).
  • Non-concessional cap: $120,000 — The non-concessional (after-tax) contributions are capped at $120,000. The bring-forward of 3 years allows the contribution of up to $360,000 in one year if the total superannuation balance is below $1.66 million. The non-concessional contributions are NOT taxed in the fund.

For the superannuation contribution planning and the strategies for the high-income earners, see our Personal Tax Guide →.

Accessing Superannuation

  • Preservation age: The superannuation benefits can be accessed at the preservation age (55 to 60, depending on the date of birth). The amounts in the accumulation phase are preserved (the "preserved benefits") until the preservation age or the satisfaction of the "conditions of release" (the "condition of release" — the retirement, the death, the permanent incapacity, the terminal medical condition, the temporary incapacity, the severe financial hardship, the compassionate grounds).
  • Retirement phase: The amounts can be transferred to the pension phase (the "account-based pension" or the "transition to retirement pension" — the "TTR") at the preservation age. The transfer balance cap is $1.9 million. The income from the assets supporting the pension is tax-free (the "ECPI"). The TTR pension income is taxed at the marginal rate minus the 15% tax offset.

For the investment strategies within the SMSF and the LRBA rules, see our Capital Gains Tax Guide →.