Concessional contributions are contributions made into an SMSF and treated as the SMSF’s assessable income. Concessional contributions include the following:
- Employer Contributions (Currently 11.5%)
- Salary Sacrifice Arrangement
- Transfers from reserves
- Personal Concessional Contribution
The contributions are taxed in your SMSF at a concessional rate of 15%.
Trustees making concessional contributions can claim a personal income tax deduction. Concessional contributions are subjected to a yearly cap. From 1 July 2024, the concessional contributions cap is increased from $27,500 to $30,000. The increase is a result of indexation in line with average weekly ordinary time earnings (AWOTE). For more information regarding concessional contribution cap, please click here.
The cap for a Member’s concessional contribution depends on their age as set out in the following table:
| Income Year |
Age and applicable cap amount |
| 2025 onwards |
All ages: $30,000 |
| 2022-2024 |
All ages: $27,500 |
| 2017-2021 |
All ages: $25,000 |
| 2016-2017 |
< 49 : $30,000 |
49 + : $35,000 |
| 2015-2016 |
< 49 : $30,000 |
49 + : $35,000 |
| 2014-2015 |
< 49 : $30,000 |
49 + : $35,000 |
| 2013-2014 |
< 59 : $25,000 |
59 + : $35,000 |
Employer Contributions
The most common types of concessional contributions are employer contributions (e.g. super guarantee and salary sacrifice contributions). Most SMSF’s receive concessional contributions from their employers at a rate of 11.5%.
Personal Concessional Contributions
For the purposes of claiming a deduction in a personal capacity for Super contributions, the above form should be completed. Remember to retain a copy of this form, which is also referred to as a S290-170 notice, as evidence that the concessional contribution was paid to the SMSF. It is imperative to note that Trustees must provide a Notice of Intent to Deduct prior to lodging a personal income tax return or earlier than the end of the next income year.
Please see the links below explaining the two cases dealing with Personal Concessional Contributions.
Johnston and Commissioner of Taxation [2011] AATA 20 (20 January 2011)
Khanna and Commissioner of Taxation (Taxation) [2022] AATA 33 (14 January 2022)
Low Income Superannuation Tax Offset
From 1 July 2017, low-income earner might be eligible for Low Income Superannuation Tax Offset (LISTO). The purpose of LISTO is to make sure that eligible persons paid less tax on their super concessional contributions than on their take-home pay. For more information on LISTO, please see here.
Excess Concessional Contributions Cap
When contributions made by the Members of the Fund exceed the concessional contributions cap of $30,000, an additional tax is applied to the Members.
If you exceed your concessional contributions caps, you may elect to withdraw up to 85% of your excess concessional contributions from your super fund to help pay your income tax liability. If you do not elect to release your excess concessional contributions, the excess amount may be taxed at penalty rate and treated as non-concessional contributions.
Carry-forward unused concessional contributions
From 1 July 2018, Members can make ‘carry-forward’ concessional super contributions if their total superannuation balance is less than $500,000 at the end of 30 June in the previous year. Members can access their unused concessional contributions caps on a rolling basis for five consecutive years. Unused amounts are available for a maximum of five years and will expire after this.
The first year in which Members can access unused concessional contributions is the 2020 financial year.
For more information on contributions, please refer to the ATO Website.
Timing of Contributions
Generally, a contribution is recognised and recorded in the year when cash is received by the SMSF. Taxation Ruling 2010/1 provides direction with respect to timing of contributions.
For more information on taxation in Super, please see here.
