What is the transfer balance cap?
The transfer balance cap is the lifetime limit on how much super you can move into a tax-free retirement pension. From 1 July 2025 the general cap is $2 million (ATO). You can still hold more than that in super — it simply stays in the accumulation phase, where earnings are taxed at 15% rather than being tax-free.
By Justin Porrins, CFP® · SMSF Specialist Adviser™ · Last reviewed 25 June 2026
Why it exists
The cap limits how much super can sit in the tax-free retirement (pension) phase. It’s indexed in $100,000 steps over time, which is how the general cap has risen from $1.6 million when it began to $2 million from 2025–26.
What it means in practice
Balances above the cap stay in accumulation, where investment earnings are taxed at 15%. Managing the split between pension and accumulation — and the timing of when you start a pension — becomes a real planning lever as you approach retirement. Your personal cap can differ from the general cap if you started a retirement pension in an earlier year.
Common questions
Can I have more than the transfer balance cap in super?
Yes. The cap only limits how much you can move into the tax-free pension phase. Anything above your cap stays in the accumulation phase, where earnings are taxed at 15% rather than being tax-free.
Is the transfer balance cap the same for everyone?
The general cap is $2 million from 2025–26, but your personal transfer balance cap depends on when you first started a retirement-phase pension, because of how indexation is applied.
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