The Super changes starting 1 July 2026 could trigger excess concessional contributions tax for some taxpayers

As seen in Woopi News April 2026

Payday super comes into effect 1 July 2026. Instead of employers being required to pay employees Superannuation Guarantee (SG) quarterly (every 3 months) they will now be required to make Super Guarantee contributions when the wages are paid.

This means in the 2026/27 financial year, excess concessional super contributions could be received by your superannuation fund, where the total contributions receive by your fund exceed the $32,500 Concessional Contributions Cap. Employer Contributions for April, May and June 2026 could be received by your superannuation fund in July 2026 and then contributions for the remainder of the 2026/27 financial year should be received on a weekly, fortnightly or monthly basis depending on your pay cycle, meaning up to 15 months of contributions could be receipted by your fund in the 2027 financial year.

A lot of taxpayers will not be impacted by these changes as the amount contributed will be under the $32,500 cap. However, those on high incomes or that salary sacrifice or make additional deductible super contributions, need to take more care to not exceed the cap. It would be worthwhile to seek advice to adjust your additional super contributions between 1 July 2026 – 30 June 2027 to avoid exceeding the cap and paying excess concessional contributions tax when you lodge your 2027 Tax Return.

Excess Concessional Contributions tax is calculated by adding the excess contributions onto your taxable income and taxing them at your marginal tax rate, plus Medicare levy. There is a 15% tax offset to avoid double taxation as this tax was already paid by your super fund. You can withdraw from super up to 85% of the excess contributions to help pay the tax, provided the paperwork is lodged within the required timeframes.

Disclaimer: It is important to note that the information above is not financial advice. If you believe you may be impacted you should obtain advice that is tailored to your specific circumstances, from an appropriately licenced financial adviser.