Several superannuation changes landed together in 2026-27: payday super, Division 296 tax, and higher contribution and transfer balance caps. Most Australians are affected by the first and third — Division 296 tax only hits people with a total super balance above $3 million.
Key facts
| What changed | Before | Now |
|---|---|---|
| Payday super | — | Employers pay SG every payday from 1 July 2026 |
| Division 296 tax | — | Extra 15% above $3m TSB, +10% above $10m |
| Concessional contributions cap | $30,000 | $32,500 |
| Non-concessional contributions cap | $120,000 | $130,000 |
| General transfer balance cap | $2.0m | $2.1m |
Payday super: affects almost every employee
Payday super requires employers to pay super guarantee with every pay run and get it into your fund within 7 business days, replacing the old quarterly payment cycle. It doesn't change your super rate, but it does mean your contributions start earning returns sooner — and it gives the ATO much faster visibility into employers who fall behind. For most workers, this is the single biggest practical change of the 2026-27 super reforms, since it affects every payday rather than a small subset of very large balances.
Division 296 tax: a small group, a big change
Division 296 tax adds an extra 15% on the share of earnings attributed to super balances above $3 million, and a further 10% above $10 million. The original proposal was controversial because it would have taxed unrealised gains, but the law as passed uses realised earnings that each super fund calculates and reports to the ATO. It only applies if your balance exceeds $3 million — a small share of super members, concentrated in large self-managed super funds. See our full Division 293 tax guide for how it interacts with existing high-income super settings. Both the $3 million and $10 million thresholds are indexed to CPI over time, so the number of people affected should grow only gradually rather than jumping sharply as balances rise with contributions and investment growth.
Why the government made these changes
Treasurer Jim Chalmers has framed the Better Targeted Superannuation Concessions reforms, including Division 296, as making the tax system fairer by targeting concessions that disproportionately benefited a small number of very large balances, while payday super was pitched primarily as a compliance and retirement-adequacy measure to stop unpaid or late super guarantee eroding workers' balances over time. Together, the government has described the package as balancing fairness at the top end of the super system with stronger protections and faster contributions for everyday workers further down the balance scale.
Higher caps: more room for most savers
Separately from Division 296, the concessional contributions cap rose to $32,500 and the non-concessional cap to $130,000, alongside the general transfer balance cap moving to $2.1 million. These increases give most super members more room to grow their balance through salary sacrifice or after-tax contributions before hitting a cap. The concessional cap increase in particular benefits anyone using salary sacrifice to reduce taxable income, since it creates extra headroom before the additional-tax rules for excess contributions kick in.
What this means for your pay
For most people, the practical impact of the 2026-27 super changes is payday super arriving sooner and more reliably, plus more headroom in the contribution caps if you're topping up your balance. Model your position with our superannuation calculator, and only worry about Division 296 tax if your total super balance is approaching $3 million.