Your essential guide to making the most of tax-effective retirement savings
Superannuation continues to be one of the most tax-effective ways to save for retirement—but the rules can be complex. For the 2025–26 financial year, several thresholds and caps have changed, and it’s more important than ever to ensure your contributions strategy is aligned with the latest tax settings.
At Boa & Co. Chartered Accountants, we help clients make the most of their super—whether you’re still growing your retirement nest egg or already drawing a pension.
Concessional Contributions Cap
- New cap for 2025–26: $30,000 (up from $27,500)
- Includes employer SG contributions, salary sacrifice, and personal deductible contributions
- Taxed at 15% in the fund
- High income earners may pay an additional 15% tax under Division 293 (see below)
Carry-forward contributions: If your total super balance was under $500,000 on 30 June 2025, you may carry forward unused cap space from the last five financial years to boost your contributions.
Exceeding the cap: Excess amounts are added to your taxable income and taxed at your marginal rate.
Non-Concessional Contributions Cap
- Cap remains at $120,000 for 2025–26
- These are after-tax contributions made from your personal savings
- You may trigger the bring-forward rule to contribute up to:
- $240,000 over two years (if under age 75 and total super balance < $1.66M), or
- $360,000 over three years (if total super balance < $1.48M)
- $240,000 over two years (if under age 75 and total super balance < $1.66M), or
No non-concessional contributions allowed if your total super balance on 30 June 2025 is $1.9M or more
Superannuation Guarantee (SG) Rate
- From 1 July 2025, employers must contribute 11.5% of ordinary time earnings
- The SG rate will increase to 12% on 1 July 2026
Division 293 Tax
- Applies an additional 15% tax on concessional contributions
- Threshold remains at $250,000 adjusted taxable income
- Effectively means 30% tax on concessional contributions for high-income earners
Super Co-Contribution
- Available for low to middle-income earners who make personal (after-tax) contributions
- Maximum government co-contribution is $500
- Full amount available if your total income is $45,400 or less
- Phases out completely at $60,400
Spouse Contribution Tax Offset
- Up to $540 offset for contributing to your spouse’s super
- Available if your spouse earns less than $40,000
Low Income Super Tax Offset (LISTO)
- Refund of up to $500 for low-income earners
- Applies if you earn $37,000 or less and receive concessional contributions
Downsizer Contributions
- Individuals aged 55 or older can contribute up to $300,000 (per person) from the sale of their home
- Not counted toward concessional or non-concessional caps
- Can still make this contribution even if total super balance exceeds $1.9M
First Home Super Saver Scheme (FHSSS)
- Maximum release cap: $50,000
- Contributions must be voluntary and within normal caps
- Allows first home buyers to access super savings for a home deposit
Capital Gains Tax (CGT) Cap
- Lifetime cap for CGT contributions from small business sale: $1.705M (2025–26)
Untaxed Plan Cap
- Maximum amount from an untaxed super fund that can be rolled into a taxed environment: $1.765M
Transfer Balance Cap (TBC)
- Lifetime limit on the amount you can move into a tax-free retirement phase account: $1.9M
Total Superannuation Balance (TSB)
- Your TSB as of 30 June affects your eligibility for:
- Non-concessional contributions
- Bring-forward rule
- LISTO and co-contributions
- Catch-up concessional contributions
- Non-concessional contributions
Minimum Pension Payments (Account-Based)
These are based on age and apply from 1 July 2025:
| Age | Minimum % of Account Balance |
| Under 65 | 4% |
| 65–74 | 5% |
| 75–79 | 6% |
| 80–84 | 7% |
| 85–89 | 9% |
| 90–94 | 11% |
| 95+ | 14% |
Preservation Age
- The age at which you can access your super under retirement conditions depends on your date of birth:
- Born before 1 July 1960 – 55
- Born 1 July 1960 to 30 June 1961 – 56
- Increasing by 1 year for each later birth year, up to 60 for those born after 30 June 1964
- Born before 1 July 1960 – 55
Tax on Super Lump Sums
- Tax-free component: not taxed at any age
- Taxable component:
- Under preservation age: taxed at 22% (including Medicare levy)
- Over preservation age but under 60: taxed at marginal rate with a $235,000 tax-free threshold (2025–26)
- Age 60 and over: generally tax-free
- Under preservation age: taxed at 22% (including Medicare levy)
Income Tax Rates and Age Pension Thresholds
Standard income tax rates and Medicare levy apply outside the super system. Age Pension thresholds are indexed periodically and affect eligibility for government benefits.
The Bottom Line
With increasing caps, thresholds and incentives, 2025–26 is shaping up to be a valuable year for super contributions—but the complexity of the system means expert advice can deliver real tax savings.
Need help optimizing your super strategy? Contact Boa & Co. Chartered Accountants at [email protected], 1300 952 286. Visit us at www.boanco.com.au