A Non-Concessional Contribution is after tax money that made into an SMSF from your own personal Bank Account and not from your Employer. These contributions are not taxed in your Fund because they have been taxed in your personal capacity.
From 1 July 2024, the Non-Concessional Contribution cap will increase from $110,000 to $120,000. If the Non-Concessional Contributions cap is exceeded, there may be a penalty tax applied on the excess contribution.
Please note that if the superannuation balance is more than $1.6 million, the Member cannot make any further Non-Concessional Contributions to the Fund as of 1 July 2017. From 1 July 2021, Non-Concessional Contributions cannot be made if the superannuation balance exceeds $1.7 million, and from 1 July 2023, this cap increases to $1.9 million.
| Contributions | Cap to 30 June 2021 | Cap from 1 July 2021 | Cap from 1 July 2024 |
| Concessional | $25,000 | $27,500 | $30,000 |
| Non- concessional (NCC) | $100,000 | $110,000 | $120,000 |
| Bring-forward maximum | $300,000 | $330,000 | $360,000 |
From 1 July 2021, for Members who is aged under 67 will have the option to utilise the three-year bring forward rule. However, from 1 July 2022, this rule will now apply to those under the age of 75. For a better understanding of how the bring-forward rule works, please see the example below:
Sam, who is 40, has a superannuation balance of $200,000 and makes a Non-Concessional Contribution of $300,000 in the 2021 financial year. This automatically triggers the three-year bring forward rule. Depending on the year that the Non-Concessional Contribution is made, transitional arrangements will apply differently to the remaining Non-Concessional Contribution available.
The available Non-Concessional Contribution cap for Sam is $320,000 for 2021, 2022 and 2023 financial years. This means that after making the $300,000 Non-Concessional Contribution in the 2021 financial year, Sam will only be able to make Non-Concessional Contribution of $20,000 in the next two financial years without breaching the cap.
The Income Tax Assessment Acts (1997) sets out the general rule for non-concessional contributions in SECT 292.85. However, please note that non-concessional contributions are non-taxable.
Other Non-Concessional Contribution points to note
- Members must be under the age of 65 at the relevant times for the 3-year bring forward rule to apply
- From 1 July 2021, the age limit for the bring-forward rule to apply has increased to below the age of 67
- Any person who holds a superannuation balance of more than $1.7 million cannot make any further Non-Concessional Contribution as of 1 July 2021. As of 1 July 2023, this cap increases to $1.9 million.
- For more information on other forms of Contributions in general, please see here.
