Non Concessional Contributions
Personal Contributions made into an SMSF from after tax income on which no tax deduction is claimed are known as Non Concessional Contributions. Non Concessional Contributions are personal contributions made into your SMSF from your own personal Bank Account and not from your Employer.
Eligibility to make Non Concessional Contributions
Once you reach age 75, you cannot make Non Concessional Personal Contributions to your SMSF.
However if you are turning 75 during a Financial Year you can make a Non Concessional Contribution to your SMSF on or before the day that is 28 days after the end of the month in which you turn 75. In this case your eligibility to make Non Concessional Contribution depends on your Total Superannuation Balance as at 30 June of the previous Financial Year. If you have a total superannuation balance which is equal or more than the general Transfer Balance Cap on 30 June of the previous Financial Year, you are not eligible to make Non Concessional Contributions.
The general Transfer Balance Cap for a given Financial Year is as follows:
| Income Year |
General Transfer Balance Cap |
| 2025-26 |
$2 million |
| 2024-25 |
$1.9 million |
| 2023-24 |
$1.9 million |
What happens if you contribute without being eligible?
If you are 75 or over and contribute to your SMSF without being eligible, the amount must be returned to you by your SMSF within 30 days. If the "ineligible" amounts are not returned within this time, your SMSF will have breached the superannuation contribution rules resulting in compliance issues that will be reported to the ATO in your SMSF's annual audit.
Maximum Non Concessional Contributions Allowed
If you are turning 75 during a Financial Year, you can make a Non Concessional Contribution to your SMSF on or before the day that is 28 days after the end of the month in which you turn 75 as detailed above. The Non Concessional Contributions limit for a given Financial Year is as follows:
| Income Year |
Amount of cap |
| 2025-26 |
$120,000 per member per annum |
| 2024-25 |
$120,000 per member per annum |
| 2023-24 |
$110,000 per member per annum |
Bring Forward Rule does not apply
The Bring Forward Rule allowing you to bring forward up to two years of contribution is not available to persons aged over 75.
However, if you are aged 74 on 1 July of the current Financial Year and turn 75 during the Financial Year, you may access the bring-forward arrangement in the current Financial Year if all other requirements are met.
No Tax on Non Concessional Contributions
All Non Concessional Contributions must be deposited into a Bank Account established for your SMSF. No tax is ever payable on a Non Concessional Contribution made into an SMSF either when the monies are contributed into the SMSF or when monies are accessed later on at retirement.
How ESUPERFUND tracks Non Concessional Contributions
Each Contribution and Contribution Type must be allocated to a specific Member as part of the annual compliance process. This is a legal requirement. You will be asked to confirm on whose behalf the contributions have been made and the Contribution Type using an annual checklist we send to all SMSF clients each year by 30 September. You do not need to send us confirmation at the time each Non Concessional Contribution is made. This information is only required annually and we will guide you through the process and prompt you when information is required from you. For more information on Frequently Asked Questions about the Non Concessional Contributions, please click here.
Excess Non Concessional Contributions
To the extent you make a Non Concessional Contribution exceeding your Non Concessional Contribution Limit, the ATO will contact you by sending you a Determination letter after the lodgement of your SMSF Annual Return. You will be asked to choose how your Excess Non Concessional Contributions are taxed.
You have the following options:
Option 1 Release the excess amounts from your SMSF
If you choose this option, you are electing to withdraw all your Excess Non Concessional Contributions and 85% of associated earnings from your SMSF. In this case, the Excess Non Concessional Contributions will NOT be subject to Excess Non Concessional Contributions tax. However the full associated earnings amount stated in the determination is added to your assessable income and taxed at your marginal tax rates subject to a 15% tax offset.
To select this option, you need to make an election using ATO online services or complete the excess non-concessional contributions election form and send it to the ATO. Generally, you have 60 days after the date of issue of the determination to make an election.
Once the ATO has processed your election form, they will issue a Digital Release Authority to the SMSF via the SuperStream channel. We caution that it is a breach of the SIS regulation if you release funds from the SMSF prior to receiving the Release Authority from the ATO.
Upon the receipt of the Digital Release Authority, ESUPERFUND will contact you to confirm whether you wish to proceed with releasing funds from your SMSF and how much to be released by sending a detailed message to your Client Portal Inbox.
For more information on the steps involved on completing the Release Authority and arranging the payment to the ATO, please click here.
Option 2 Pay Excess Non Concessional Contributions tax on the excess amount
If you choose not to release your Excess Non Concessional Contributions from your SMSF, the Excess Contributions over the Non Concessional Contribution Limit will be subject to Excess Contributions Tax at the highest marginal tax rate of 47%. The excess non-concessional contributions tax will need to be paid from your super.
Excess Contributions Tax can result in double taxation, with an effective tax rate of up to 94%. It is vital that you keep track of all your Non Concessional Contributions.
To select this option, you need to make an election using ATO online services or complete the excess non-concessional contributions election form and send it to the ATO. Generally, you have 60 days after the date of issue of the determination to make an election.
Once the ATO has processed your election form, they will issue a Digital Release Authority to the SMSF via the SuperStream channel. We caution that it is a breach of the SIS regulation if you release funds from the SMSF prior to receiving the Release Authority from the ATO.
Upon the receipt of the Digital Release Authority, ESUPERFUND will contact you to confirm whether you wish to proceed with releasing funds from your SMSF and how much to be released by sending a detailed message to your Client Portal Inbox.
For more information on the steps involved on completing the Release Authority and arranging the payment to the ATO, please click here.
Set up your SMSF with ESUPERFUND Today!
APPLY NOW