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
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 |
Maximum Non Concessional Contributions Allowed
If you are under age 75, 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
If you are aged under 75 at any time during the Financial Year, there is capacity to make Non Concessional Contributions of up to two or three times the annual Non Concessional Contributions Cap in that Financial Year. This is known as the bring-forward arrangement. It allows you to make extra Non Concessional Contributions without having to pay extra tax. There is no requirement to elect to use the Bring Forward Rule. It is automatically triggered in the first Financial Year in which a Non Concessional Contribution exceeds the annual limit.
Eligibility for the bring-forward arrangement depends on the following two factors:
- Your age; and
- Total Superannuation Balance on 30 June of the previous Financial Year.
1) Aged under 75 on 1 July of the Financial Year
If you are aged under 75 on 1 July of the current Financial Year and you have not previously triggered the Bring Forward Rule in the preceding two Financial Years, you may access the Bring Forward arrangement in the current Financial Year if all other requirements are met. If you are already 75 years old or older on 1 July of the current Financial Year, you cannot access the Bring Forward arrangement.
2) Total Superannuation Balance on Previous 30 June
The following tables set out the bring forward cap and bring forward period depending on the individual's Total Superannuation Balance on 30 June of the previous Financial Year:
For the 2025-26 Financial Year
| Total Superannuation Balance on 30 June 2025 |
Contribution and Bring Forward Available |
| less than $1.76 million |
3 year ($360,000) |
| $1.76 - $1.88 million |
2 year ($240,000) |
| $1.88 - $2 million |
1 year ($120,000) |
| $2 million or more |
Nil |
For the 2024-25 Financial Year
| Total Superannuation Balance on 30 June 2024 |
Contribution and Bring Forward Available |
| less than $1.66 million |
3 year ($360,000) |
| $1.66 - $1.78 million |
2 year ($240,000) |
| $1.78 - $1.9 million |
1 year ($120,000) |
| $1.9 million or more |
Nil |
For the 2023-24 Financial Year
| Total Superannuation Balance on 30 June 2023 |
Contribution and Bring Forward Available |
| less than $1.68 million |
3 year ($330,000) |
| $1.68 - $1.79 million |
2 year ($220,000) |
| $1.79 - $1.9 million |
1 year ($110,000) |
| $1.9 million or more |
Nil |
Example 1:
Assume you have a Total Superannuation Balance of $200,000 at 30 June 2025 and aged under 75 on 1 July 2025. This enables you to use the Bring Forward Rule over 3 years without exceeding the Contribution Limits. Therefore, you can make Non Concessional Contribution of up to $360,000 during the 2026, 2027 and 2028 Financial Years.
In this case, the Bring Forward rule expires at the end of the 2028 Financial Year (i.e. 30 June 2028).
Example 2:
You are aged under 75 on 1 July 2025 but have a Total Superannuation Balance of $1.80 million at 30 June 2025. This means that you cannot access the full three year bring forward as this would take your balance over $2 million (i.e. general Transfer Balance Cap for the 2026 Financial Year). You can only make a Non Concessional Contribution of up to $240,000 during the 2026 Financial Year.
Example 3:
Assume you have a Total Superannuation Balance of $1.59 million at 30 June 2023 and are aged 50 on 1 July 2023 (and therefore eligible for the Bring Forward Rule). You make a Non-Concessional Contribution of $150,000 in the 2024 Financial Year. This means you will have a remaining bring forward cap of $180,000 which can be made in the next two years (i.e. 2025 and 2026 Financial Years). Please note that the remaining cap does not change even when the annual Non Concessional Contribution Cap has increased to $120,000 in the 2025 Financial Year as you are in an active bring forward period.
As at 30 June 2024, your Total Superannuation Balance is $1.65 million and you make a Non Concessional Contribution of $100,000 in the 2025 Financial Year. This means that your remaining Non-Concessional Contribution cap at the end of the 2025 Financial Year is $80,000.
However, your Total Superannuation Balance on 30 June 2025 has increased to $2.2 million (due to growth in Asset Values). This means you cannot make any further Non Concessional Contributions during the 2026 Financial Year even if you have not fully used up the $80,000 remaining bring forward cap.
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 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.
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