Concessional contributions
Concessional contributions are contributions made into your SMSF that are included in the SMSF's assessable income. These contributions are taxed in your SMSF at a 'concessional' rate of 15%, which is often referred to as 'contributions tax'. The most common types of concessional contributions are employer contributions which include super guarantee contributions and salary sacrifice contributions and personal contributions made by the member for which the member claims an income tax deduction.
Concessional contributions are subject to a yearly cap. From 1 July 2012, the concessional cap is $25,000 per financial year.
Concessional contributions that exceed the cap are subject to excess concessional contributions tax of 31.5% in addition to the 15% contributions tax payable by your SMSF. Your member will be personally liable for this tax but can ask the super fund to release money to pay it.
Non-concessional contributions
Generally, non-concessional contributions are contributions made into your SMSF that are not included in the SMSF's assessable income. The most common type is personal contributions made by the member for which no income tax deduction is claimed.
Non-concessional contributions are subject to a yearly cap of $150,000 for members 65 or over but under 75, or $450,000 over a three-year period for members under 65. The caps are indexed annually.
If a member's non-concessional contributions exceed the cap, a tax of 46.5% is levied on the excess contributions. Individual members are personally liable for this tax and must have their super fund release an amount of money equal to the tax.
Non-concessional contributions also include excess concessional contributions for the financial year. They do not include super co-contributions, structured settlements, orders for personal injury and capital gains tax (CGT) related payments which the member has validly elected to exclude from their non-concessional contributions.
Fund-capped contributions
Fund-capped contributions are the maximum amount your fund can accept of any single fund-capped contribution.
If the member is 65 years old or over but under 75 on 1 July of the financial year, the fund-capped contribution limit is the non-concessional contributions cap for that financial year.
If the member is 64 years old or under on 1 July of the financial year, the fund-capped contribution limit is three times the non-concessional contributions cap for that financial year.
Fund-capped contributions do not include
- contributions that your member advises they intend to claim an income tax deduction for
- contributions from a structured settlement or personal injury payment (the member, or a legal personal representative should have notified you before indicating they would make this contribution)
- super co-contributions.
Your fund must return the excess amount within 30 days.
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Special acceptance rules apply for fund-capped contributions for all age groups.
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Sections within Accepting contributions and rollovers
Last Modified: Friday, 24 May 2013