This article is for owners and directors who pay themselves through a mix of salary, dividends and super, and who want to use the concessions properly without triggering an assessment they did not see coming. You will get the super contribution caps that apply for the 2026-27 year, along with the four mistakes that produce most of the unpleasant letters.
In the conversations we have with owners, the trouble comes from four ordinary places. A payment made at the wrong time, a second fund left out of the count, an entitlement someone was sitting on and never used, and a threshold that moved while nobody was watching. All four are avoidable with one conversation a year, held early enough to matter.
The super contribution caps for 2026-27
Two caps do most of the work, and both moved on 1 July 2026 after several static years.
The general concessional contributions cap is $32,500 for 2026-27, up from $30,000, where it had sat since 1 July 2024. Concessional contributions are the before-tax ones, which covers employer contributions and salary sacrifice, plus any personal contributions you claim as a tax deduction. Contributions to every fund you hold are added together against the one cap.
The non-concessional contributions cap is $130,000 for 2026-27, up from $120,000. These are the after-tax contributions you do not claim a deduction for.
Both figures come from the ATO’s published contributions caps, and both are indexed, so any advice you were given before July needs re-checking against the current year rather than the year it was written.
Going over the concessional cap does not work as a penalty. The excess is included in your taxable income and taxed at your marginal rate, and any excess left in the fund counts towards your non-concessional cap. The sting is more often the surprise than the arithmetic.
Mistake one: treating the caps as a payment date
Contributions count towards a cap in the year your super fund receives them. The day you paid, and the day the money left your bank account, do not decide it. A payment made on 28 June that lands in the fund on 2 July belongs to the following year in both directions, so it is a wasted deduction in the year you wanted it and an unplanned use of next year’s cap.
This is among the most common errors we see, and it is entirely mechanical, because clearing houses, BPAY cut-offs and end of financial year processing volumes all sit between you and the fund. The ATO makes the point explicitly on the non-concessional cap guidance, which is that a contribution you intend to count this year must reach your fund by 30 June.
The timing risk changed shape for employers from 1 July 2026 as well. Under Payday Super, super guarantee contributions must be received by the fund within seven business days after you pay your employees, rather than within 28 days of the end of a quarter. The rate stays at 12%, and the calculation moved from ordinary time earnings to qualifying earnings. For an owner drawing a salary from their own company, their own concessional total now accrues on a payday rhythm, which makes it much easier to run into the cap in a year with a bonus in it.
Mistake two: leaving carry-forward on the table
Since 1 July 2018 you may contribute more than the general concessional cap by using unused cap amounts from earlier years, provided your total super balance was less than $500,000 on 30 June of the previous financial year. Unused amounts stay available for a maximum of five years and then expire.
Carry-forward is the concession we see wasted most often, and it goes to waste for a structural reason. Owners can take low or irregular income while the business is reinvesting, so they accrue years of unused cap in exactly the years they cannot afford to use it. Then a good year arrives, or an asset is sold, and the capacity to soak up a large amount of income at a concessional rate is sitting there unnoticed.
Two things spoil it. The $500,000 balance test is measured at a point in time, so a strong market year can push you over it and close the door. Separately, the oldest year’s unused amount expires each 30 June, permanently. Both of those are calendar problems, and a calendar problem is a solvable problem if somebody is looking a year ahead.
Mistake three: contributing after tax without checking the balance test
Your non-concessional cap is nil for a year if your total super balance at the end of the previous financial year was equal to or greater than the general transfer balance cap. That cap is $2.1 million for 2026-27, up from $2 million. Contributions made in that year become excess non-concessional contributions, and the switch catches people who have never had reason to look at it.
The bring-forward rules have their own thresholds, based on your total super balance on 30 June of the previous year. If it was less than $1.84 million you can bring forward to three times the annual cap over three years, which is $390,000. If it was $1.84 million or more but less than $1.97 million, you can bring forward two times the cap over two years, which is $260,000. You also need to be under 75 at some point in the financial year.
If you trigger a bring-forward and then wait, the total is locked at three times the cap in the year you trigger it. Indexation lifting the annual cap in year two or three does not carry your bring-forward total up with it.
Mistake four: forgetting the extra tax that applies to you personally
Division 293 tax applies where your income and concessional contributions for Division 293 purposes combined exceed $250,000. It is charged at 15% of the lesser of the excess over the threshold and your taxable super contributions, and it arrives as a separate assessment after both your tax return and your fund’s reporting reach the ATO.
Business owners hit this in lumpy, unpredictable years. A capital gain, a large dividend or a one-off bonus can put an otherwise ordinary year over the line, and the assessment turns up long after the money has been spent. The contribution can still be a sound decision, but the extra tax changes the arithmetic, and it should be modelled before the contribution rather than discovered afterwards.
There is a second threshold worth knowing if your balance is substantial. Division 296 applies from 1 July 2026, with a large super balance threshold of $3 million and a very large super balance threshold of $10 million for 2026-27. We have set out how it works in our guide to the Division 296 super tax.
The one habit that prevents all four
Have the contributions conversation in February or March rather than June. Every one of these mistakes is a timing failure in technical clothing, and every one is cheap to avoid with three months of runway and expensive to fix in the last fortnight of the year.
There are four things to check in that conversation. Start with your year-to-date concessional total across every fund you hold, then your unused carry-forward capacity and which slice of it expires this 30 June. Look next at your total super balance at the last 30 June against the bring-forward and nil-cap thresholds. Then work out whether the year is shaping up to cross $250,000 for Division 293 purposes.
For clients we look after through private client advisory this runs as an annual cycle rather than a one-off event, and where the money sits in a self managed fund it is coordinated with the fund’s own obligations through our SMSF administration and tax work. Owners of professional services businesses tend to need it most, because their income is the most variable.
Book a call at pp.tax/contact/ before the year gets away from you, and we will map your super contribution caps, your carry-forward capacity and the thresholds that apply to your position this year.
