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Once you set up a SMSF with Redwood Advisory, a key question is how much can I contribute to the SMSF.

Super contributions fall into two categories:

1)      Concessional Contributions:

These are contributions where the person putting the money into the fund is claiming a tax deduction (concessional). They include:

  • Contributions made by your employer or company;
  • Contributions made under a salary sacrifice arrangement; and
  • Personal contributions claimed as a tax deduction by a self-employed person.

The concessional contributions cap is $25,000. This is scheduled to be reviewed in time for the 2014/15 financial year.

Concessional contributions are included in the super fund’s assessable income and, for most people, are taxed at 15% inside the fund. Those earning $300,000 or more have their concessional contributions (within the cap amount) taxed at a higher rate of 30% from 1 July 2012. If an individual breaches the cap, he or she is liable for additional tax of 31.5% on the excess amount. Hint: do not exceed the cap.

2)      Non-concessional contributions:

These are contributions where the person making the contribution is not claiming a tax deduction. They include:

  • Contributions made by you or another member of your fund; and
  • Spouse contributions.

Non-concessional contributions are capped at six times the concessional cap, or $150,000. For individuals under 65, there is what is known as the ‘bring forward option’, which is a way you can increase the cap in one year by up to three times by bringing forward the next two years of contributions.

Non-concessional contributions are not included in the super fund’s assessable income, which means the fund pays no tax. However, as with concessional contributions, if an individual breaches the non-concessional cap, he or she is liable for additional tax of 31.5% on the excess amount.


Non-concessional contributions don’t include the super co-contribution, a contribution from a structured settlement or payout, and the capital gains tax small-business concession.

This highlights the importance of understanding the concessional and non-concession contribution limits for each year to ensure the limits of not exceeded and therefore avoiding additional tax.

This article was written by Ivan Filipovic – Director of Redwood Advisory – 1300 790 110

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Ivan Filipovic

Ivan Filipovic is an experienced, independent Property, SMSF and Finance Expert and the founder of Redwood Advisory. Ivan has been educating and coaching investors for over 15 years and has built a successful property portfolio with a number of positive geared properties across Australia.  Ivan provides valuable and honest guidance by educating Australians on how to invest successfully protect yourself with knowledge, contact Ivan today for a complimentary consultation on 1300 790 110 or email ivan@redwoodadvisory.com.au

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