Key super and tax changes for FY 2026-27

One of the biggest changes to Australia's super system was the introduction of Payday Super.

• Employers are now generally required to pay 12% Super Guarantee (SG) contributions at the same time as salary and wages, rather than quarterly, which means super contributions are paid into members' accounts sooner.
• It may make it easier for employees to track their super payments and was also designed to reduce unpaid or delayed super.
• These changes should enable many Australians’ super balances to compound more effectively, resulting in higher super balances at retirement. 

The maximum caps for superannuation contributions have increased.

• The concessional (before-tax) contribution cap increased from $30,000 to $32,500 a year (employer SG contributions count towards this cap).
• The non-concessional (after-tax) contribution cap increased from $120,000 to $130,000 a year.
• The maximum bring-forward contribution amount increased from $360,000 to $390,000.

The maximum amount that can be transferred into a tax-free retirement-phase income stream increased.

• The general transfer balance cap increased from $2 million to $2.1 million.
• The full increase applies to people starting a retirement-phase income stream for the first time from 1 July 2026.
•  Some retirees may be eligible for a proportional increase in their personal transfer balance cap depending on how much of their cap they have previously used.
• If you have previously transferred the maximum amount, you are not eligible for any further indexation.

Higher thresholds expand access to incentives such as the government co-contribution payment.

• More Australians are now likely to be eligible for the government’s co-contribution payment of up to a maximum of $500.
• The lower income threshold at which people may be eligible to receive the full $500 co-contribution increased from $47,488 to $49,293. The maximum co-contribution then reduces by 3.333 cents for every dollar above this threshold. The upper income threshold at which the payment cuts out increased from $62,488 to $64,293.

More super will be paid on government funded Parental Leave Pay. 

• From 1 July 2026, eligible parents will start receiving super contributions from the Government in relation to their Paid Parental Leave Payments. The first payments will be made for parents who received Parental Leave Pay during the 2025-26 financial year.
• The amount of Parental Leave Pay is increasing from 120 days in 2025-26 to 130 days in 2026-27, so the Paid Parental Leave Superannuation Contribution will increase in line with the increase in paid leave days available to new parents.
• Parental Leave Pay is based on the national minimum wage, which is now approximately $1,004.90 per week and attracts super at the SG rate of 12%.

New tax rules for people with very large super balances came into effect – although it affects only a small proportion of Australians who have very high super balances.

• Division 296 now applies to individuals with total super balances above $3 million.
• An additional 15% tax applies to earnings attributable to the portion of a balance above $3 million.
• For balances above $10 million, a further 10% tax applies, bringing the total additional tax to 25% on earnings attributable to amounts above that threshold.

The Government delivered the first stage of its planned personal income tax cuts.

• The tax rate on taxable income between $18,201 and $45,000 reduced from 16% to 15%, with a further reduction to 14% scheduled from 1 July 2027.
• Eligible taxpayers could receive up to $268 in tax savings in 2026–27, expected to increase to $536 from 2027–28. 

The Government increased Medicare levy low-income thresholds by 2.9% for the 2025-26 financial year.

• The changes mean some low-income earners may pay less Medicare levy, or none at all.
• The threshold for singles increased to $28,011 while the family threshold increased to $47,238.
• The threshold for single seniors and pensioners increased to $44,268 and the threshold for senior and pensioner families increased to $61,623. 

A simpler approach to claiming some work-related in your tax return became available.

• Workers can now claim an instant tax deduction of up to $1,000 for eligible work-related expenses without needing to keep receipts.
• People who incur higher eligible expenses can still choose to claim their actual costs under existing rules.