While much of the attention on Budget night focused on capital gains tax, negative gearing, and trust distributions, there are several significant superannuation changes taking effect from 1 July 2026. These were largely legislated prior to the Budget, but they are significant enough to warrant a timely reminder.

Higher Tax on Large Superannuation Balances

From 1 July 2026, if your total superannuation balance across all funds exceeds $3 million, the earnings attributable to the portion above that threshold will be subject to an additional 15% tax effectively doubling the tax rate on those earnings from 15% to 30%. This legislation received Royal Assent on 13 March 2026 and is now law. Importantly, the tax now only applies to taxable income and not unrealised gains like originally proposed. The ATO will issue an assessment and you have 84 days to pay, with the option to release funds from your account to meet the liability.

Transfer Balance Cap Increase

The transfer balance cap — the maximum amount you can hold in a tax-free retirement phase pension — increases from $2.0 million to $2.1 million from 1 July 2026. If you are planning to commence a retirement phase pension in the near future, or were previously unable to move your full intended balance into retirement phase, this increase may present a planning opportunity.

Payday Super

From 1 July 2026, employers are required to pay superannuation contributions at the same time as wages, rather than quarterly. This is a significant change for small and medium businesses. Payroll systems will need to be updated before the changeover date, and contributions must reach the employee’s fund within seven business days of each pay date.

Whether your superannuation balance is approaching $3 million, you are planning to commence a retirement pension, or you are a small business employer preparing for payday super these changes need attention before 1 July 2026.

Please contact us to discuss your situation so we can help you prepare in time.
t: + 61 7 3177 4120
e: advisors@hksrussell.com

Posted on May 15, 2026 by Charisse Russell - Articles