What Are SMSF Non-Concessional Contributions

Non-concessional contributions (NCCs) to an SMSF are after-tax contributions made by members from income that has already been taxed.

Unlike concessional contributions, NCCs are not taxed within the SMSF when contributed. These contributions allow members to enhance their retirement savings beyond concessional caps, but they are subject to strict limits to prevent excessive tax-free inflows into superannuation.

Annual Caps for Non-Concessional Contributions in 2025

For the financial years 2024–25 and 2025–26, the cap on NCCs is set at $120,000. This cap is indexed in accordance with average weekly ordinary time earnings and ensures equitable contribution limits.

Members exceeding this cap without qualifying for exemptions will face excess contributions tax and reporting obligations to the ATO. Maintaining contribution discipline is essential for compliance and to avoid penalties.

SMSF Non-Concessional Contributions

The Bring-Forward Rule

The bring-forward rule permits eligible SMSF members under age 75 to contribute up to three times the general annual NCC cap at once (up to AUD$360,000) across a three-year period. This rule facilitates strategic contributions, such as during asset sales or inheritances. Eligibility is determined by the member’s total superannuation balance at the previous 30 June.

From 1 July 2025, the eligibility thresholds are as follows: those with a total super balance under $1.76 million may bring forward three years’ worth of NCC caps ($360,000), balances from $1.76 million to less than $1.88 million may bring forward two years’ worth ($240,000), and balances of $1.88 million or above are limited to the normal $120,000 annual cap. Those with balances of $2 million or more are unable to make NCCs.

Once triggered, the bring-forward period fixes the contribution cap for the three-year period, unaffected by cap indexation during that time.

Compliance

Since NCCs come from post-tax income, they enter the SMSF tax-free upon contribution. However, investment earnings within the fund remain taxable, typically at 15%. Members need not report NCCs as deductions on personal tax returns, but exceeding caps can trigger excess contributions tax, which is included in the member’s assessable income and taxed at the highest marginal rate. Members receive a 15% tax offset reflecting contributions tax already paid by the SMSF.

Compliance requires trustees and members to carefully monitor contributions and total super balances, maintain accurate records, and declare excesses appropriately in SMSF and personal tax returns. The ATO enforces these through audits and penalty regimes to ensure fairness in superannuation tax advantages.

Summary

Non-concessional contributions provide a mechanism to accelerate retirement savings, especially for those with fluctuating incomes or financial windfalls. Understanding eligibility, caps, and timings, particularly under the bring-forward rule, is critical to optimise contributions while avoiding unexpected taxes and compliance problems.

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(GENERAL INFORMATION ONLY)

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