Concessional Contributions

Concessional contributions are contributions made into an SMSF and treated as the SMSF’s assessable income. Concessional contributions include the following:

• Employer Contributions (Currently 12%)
• 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 2026, the concessional contributions cap is increased from $30,000 to $32,500. 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:

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 12%.

Personal Concessional Contributions

Notice of Intent to claim a personal contribution – download

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 $32,500, additional tax may apply.

If you exceed your concessional contributions cap, you may choose to withdraw up to 85% of the excess concessional contributions from your super fund. This can be used to help pay your personal 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.

If your non-concessional contributions cap is nil, the excess amount will be treated as an excess non-concessional contribution. This will trigger a determination from the ATO to pay additional tax.

Carry-forward unused concessional contributions

From 1 July 2018, Members can make ‘carry-forward’ concessional super contributions if their total superannuation balance, including their Retail Superannuation Balance, SMSF Superannuation Balance and grossed up loans (if it’s a related party loan or the Member has met a condition of release), 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. However, if your grossed up superannuation balance exceeds $500,000, you are unable to make carry-forward concessional super contributions and are restricted to the standard annual concessional contributions cap.

For example, Susie’s total superannuation balance is held within her SMSF which she is the only Member of and has met a condition of release. Susie has only cash and term deposits in her SMSF for the 2026FY. The SMSF’s net assets value are $400,000 as at 30 June 2026. Susie’s total superannuation balance at the end of the 2026FY is $400,000.

In the 2027FY, Susie’s term deposits mature and she purchases a commercial property with a loan of $500,000. The SMSF’s net assets value at the end of the year are $450,000. Her total superannuation balance at the end of the 2027FY is $950,000. This is because a Members total superannuation balance includes grossed up loans.

In the 2028FY, Susie will not be able to use the carry-forward rule as her total superannuation balance is over $500,000.

For more information on how the Total Super Balance is calculated, please see the guidance from the ATO here.

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.

FAQs on concessional contributions