Carry-Forward Super: How Do You Use Five Years of Unused Caps?
Catch-up contributions for the year your income spikes
Missed super contributions in earlier years? You may be able to catch up. The carry-forward rules let you use unused concessional cap amounts from the past five years on top of this year's $32,500 cap, ideal for the year you sell an asset or receive a big bonus.
Why This Matters
A large one-off income spike, a capital gain, a bonus or a bumper business year, can push you into a much higher tax bracket for a single year. Carry-forward contributions let you shelter a big chunk of that spike inside super at 15% tax instead. It is one of the few strategies that can knock five figures off a one-off tax bill, completely within the rules.
Who It Applies To
Anyone whose total super balance was under $500,000 at 30 June of the previous financial year. That covers most employees and sole traders. Unused cap amounts are available from 2018-19 onwards and expire after five years.
Key Rules for the 2026-27 Income Year
- Balance test first. Your total super balance must be under $500,000 at the previous 30 June to use carry-forward amounts this year.
- Five-year window. Unused caps roll forward for five years, oldest amounts used first, then expire.
- Stacks on the annual cap. Carry-forward space sits on top of the $32,500 cap for 2026-27.
- Check before you contribute. Your exact unused amount is shown in ATO online services through myGov, so there is no guesswork.
- Deduction rules still apply. Personal contributions still need a notice of intent lodged with your fund and its acknowledgment.
Run the numbers first: OzLedger can model your carry-forward cap space before 30 June, so you contribute the right amount against the right income.
Common Mistakes to Avoid
- Assuming eligibility. One dollar over the $500,000 balance test and carry-forward is off the table for that year.
- Letting old caps expire. 2021-22 unused amounts disappear after 2026-27, so use the oldest first.
- Contributing more than you can deduct. A deduction can't create a tax loss, so match the contribution to your taxable income.
A Practical Example
Lena, a sole trader, sells an investment property in 2026-27 with a $90,000 taxable capital gain after the CGT discount. Her super balance is $310,000 and she has $38,000 of unused caps from the past five years. She contributes $38,000, claims the deduction, and instead of paying up to 39% on that slice of the gain she pays 15% inside super, saving roughly $9,000 while boosting her retirement savings.
Carry-forward contributions let you shelter a big chunk of a one-off income spike inside super at 15% tax instead.
Key Takeaways
Catch up on missed years
Up to five years of unused concessional caps may be waiting for you to use.
The $500,000 balance test
Your total super balance must be under $500,000, measured at the previous 30 June.
Best against income spikes
Most valuable in a year of capital gains, a bonus or a strong business result.
Frequently Asked Questions
Log in to myGov, go to ATO online services, then Super, then Information, then Carry forward concessional contributions. The exact figure for each year is listed.
Yes. Each year's unused amount lasts five years. An amount from 2021-22 must be used by the end of 2026-27 or it is gone.
Absolutely. You can salary sacrifice extra or make a personal deductible contribution; the rules are the same as for sole traders.
In a year your income jumps, through a capital gain, redundancy payout, bonus or strong business year, because the deduction offsets income taxed at your highest rate.
No. You can use part of it this year and save the rest, subject to the five-year expiry and passing the $500,000 balance test again in each year you want to contribute.
Ready to keep more of what you earn?
OzLedger prepares personalised 2026-27 tax plans for employees and sole traders, and can model your carry-forward cap space before 30 June. Visit ozledger.com.au or email info@ozledger.com.au to get started.
This article is general information only and does not take into account your personal circumstances. It is not tax, legal or financial advice. Tax laws and thresholds change, and the figures here are based on ATO guidance current at the time of writing. Before acting, speak with a registered tax agent. The OzLedger team is always happy to help.