Table of contents
Two contribution types. Two tax treatments. One decision that shapes how much you actually keep.
Concessional contributions go in before tax and cop 15% inside the fund. Non-concessional contributions are your after-tax money going in, no entry tax, but tighter rules on how much and when. That's the whole framework. Everything else is caps, timing, and the paperwork that keeps the ATO off your back.
The caps changed on 1 July 2026, so the figures below are current. If you've been reading older guides quoting $30,000 and $120,000, those were the 2024-26 numbers. We'll flag the transitions where they matter.
This is general information for SMSF trustees, not personal advice.
Understanding Concessional Contributions
Concessional contributions are the ones your fund pays 15% tax on when they land. Three sources make up almost all of them.
Employer Super Guarantee (SG). The mandatory contribution your employer sends across each quarter.
Salary sacrifice. Extra amounts your employer redirects from pre-tax salary into super, on top of SG.
Personal deductible contributions. Money you contribute from your own bank account and then claim a tax deduction for in your personal return.
They're called concessional because they're taxed at a concessional rate inside super (15%) rather than your marginal rate outside it. For anyone earning above roughly $45,000, that's a real gap.
The concessional contributions cap for 2026-27 is $32,500. That's up from $30,000, which ran from 1 July 2024 to 30 June 2026, and $27,500 before that. The cap covers all three sources combined, not each one separately. So if your employer paid $15,000 SG this year, your salary sacrifice and personal deductible contributions together can only fill the remaining $17,500 before you're over.
Claiming a deduction for a personal contribution? You have to lodge a notice of intent to claim a deduction with your fund before you lodge your tax return, and the fund has to acknowledge it. Miss that step and the deduction disappears. It's the single most common mistake we see at return time.
Where After-Tax Contributions Fit In
Non-concessional contributions are after-tax contributions. You've already paid income tax on the money, so it doesn't get taxed again on the way in.
The cap for 2026-27 is $130,000. Up from $120,000 in the prior two years.
There's a catch that trips people up. If your total superannuation balance on 30 June of the previous financial year was at or above the general transfer balance cap ($2.1 million for 2026-27), your non-concessional cap for the current year is nil. Contribute anyway and it's all excess.
When would a trustee actually make one? Usually one of four situations. Inheritance landing in your personal name. Sale of an investment property or business asset. A large bonus you don't want sitting in a taxable environment. Or bringing spouse balances closer together for estate and tax planning reasons. Downsizer contributions sit alongside these but have their own separate rules.
Concessional vs non-concessional at a glance
| Feature | Concessional | Non-concessional |
| Tax on entry | 15% inside the fund | Nil |
| Source of funds | Pre-tax (employer, salary sacrifice, deductible personal) | After-tax personal money |
| Annual cap 2026-27 | $32,500 | $130,000 (nil if TSB ≥ $2.1m) |
| Bring-forward | Not available | Up to 3x cap for under 75s |
| Carry-forward | Yes, if TSB under $500k | Not available |
| Who benefits most | Higher marginal rate earners wanting tax relief now | Members with lump sums to shift into super |
Using unused concessional cap from prior years
The carry-forward rule is the most under-used lever in the system. It lets you use unused concessional contributions from up to five prior financial years, provided your total super balance was under $500,000 on 30 June of the previous financial year.
The rule started on 1 July 2018, so 2018-19 was the first year that could generate carry-forward room. Unused amounts expire after five years.
Here's how it plays out with real numbers.
Say a member had a TSB of $380,000 on 30 June 2026. Across the prior five years, they contributed $10,000 concessional each year against caps that ranged from $27,500 to $30,000. That's roughly $70,000 to $80,000 of unused cap sitting in the bank.
In 2026-27, they sell an investment property and end up with a large taxable gain. They can make a personal deductible contribution of $32,500 (the standard cap) plus the accumulated carry-forward amount in a single year, wiping out a big chunk of that gain at 15% inside super instead of their marginal rate.
The rule earns its keep in years like that. Variable income earners, contractors, business owners selling assets, anyone with a bonus year. If your TSB is drifting near $500,000, use it before you cross the threshold and lose access.
The bring-forward rule explained
The bring-forward rule is the non-concessional equivalent, but it works differently. Instead of pulling forward unused amounts from prior years, it lets you bring future years' caps into the current year.
Members under 75 can contribute up to three times the annual cap in a single year. At the 2026-27 cap of $130,000, that's up to $390,000 in one hit, provided your total super balance allows it.
TSB scales the amount you can bring forward:
- TSB below the trigger threshold: full three-year bring-forward available
- TSB in the middle band: two-year bring-forward
- TSB near the transfer balance cap: no bring-forward available
- TSB at or above $2.1m: nil cap, no contribution at all
The accidental trigger is where trustees get caught. If you contribute more than the annual cap in a year (even by a dollar), you've triggered the bring-forward whether you meant to or not. That locks your cap across the next two years to whatever's left of the three-year total. We've seen members make a $135,000 contribution thinking they were $5,000 over, only to realise they'd used up their next two years' room as well.
Plan the trigger. Don't stumble into it.
What happens when you go over the cap
Different rules apply depending on which cap you breach.
Excess concessional contributions are added to your assessable income and taxed at your marginal rate, with a 15% tax offset to account for the tax the fund already paid. You can elect to release up to 85% of the excess from your fund to help pay the extra tax. If you don't release it, or can't, you could end up paying up to 94% in total tax across fund and personal levels. There's also an excess concessional contributions charge to cover the timing gap.
Excess non-concessional contributions are worse if left alone. You can elect to withdraw the excess along with 85% of the associated earnings (the earnings are then taxed at your marginal rate). If you don't withdraw, the excess is taxed at 47%.
Division 293 tax is a separate hit for high earners. If your combined income and concessional contributions exceed $250,000, an extra 15% tax applies to the concessional contributions above that threshold. It doesn't stop the contribution, it just doubles the entry tax on part of it.
Spot an excess before lodgement and there's usually room to fix it cleanly. A quick review with your SMSF accountant before the next return is often the difference between a quick amendment and a full excess contributions determination.
When the work test still applies
Age drives this one.
Under 67: no work test. Contribute freely within the caps.
67 to 74: you can still receive contributions without a work test, but if you want to claim a personal deduction, you have to meet the work test or the one-off exemption. The work test requires at least 40 hours of gainful employment across a consecutive 30-day period in the financial year the contribution is made. Gainful employment means paid work, not volunteering or director fees for a dormant company.
The one-off work test exemption is available if your total super balance was under $300,000 at the end of the previous income year and you met the work test in that prior year. It can only be used once, ever.
75 and over: contributions are largely restricted to mandated employer contributions (like SG) and downsizer contributions. Voluntary personal contributions generally can't be accepted after the 28th day of the month following your 75th birthday.
How contributions work inside an SMSF
This is where SMSFs diverge from retail and industry funds, and where trustees get themselves into trouble without meaning to.
Trustee bank account receipt. Every contribution has to hit the SMSF's bank account. Cash contributions aren't a thing. If a member wants to contribute an asset (in specie), it has to be an allowed asset type (listed shares, business real property) and valued at market. Everything gets coded in the accounting file by member and by contribution type at the point of receipt, not at year-end reconciliation.
Member contribution allocations. Each contribution has to be allocated to a specific member's account and reported to the ATO through the fund's annual return. Get the coding wrong and it flows through incorrectly to the member's ATO record, which then feeds into their cap calculations. It's one of the most common audit findings we see when we take on funds from other providers.
Contribution reserving (the 28-day rule). A contribution made in June can be held in a contributions reserve and allocated to the member within 28 days of the following month. The upshot: you can make two years' worth of concessional contributions in a single tax year while only using one year's cap. It's a legitimate strategy, particularly useful for members with a one-off high-income year. But the paperwork has to be right. The ATO wants a trust deed that permits reserving, a documented trustee resolution, and correct reporting on the SMSF annual return.
Audit trail. Auditors look at bank statements, contribution allocation records, notices of intent to claim (for personal deductible contributions), and TSB calculations at 30 June. Missing documentation is the fastest way to a qualified audit report.
Timing risks around 30 June. A contribution counts in the year it's received by the fund, not the year it's sent. A transfer initiated on 30 June that lands on 1 July is next year's contribution. Every year we get calls from trustees who left it to the last day and missed the cutoff.
For the operational side of trustee life beyond contributions, our guide to running an SMSF covers the day-to-day admin obligations most people don't see coming.
What changed in 2026 and what's coming
The 1 July 2026 indexation lifted the concessional cap from $30,000 to $32,500 and the non-concessional cap from $120,000 to $130,000. The general transfer balance cap moved to $2.1 million, which flows through to non-concessional eligibility and pension transfer limits.
The other conversation trustees keep raising is Division 296, the proposed additional tax on earnings for members with total super balances above $3 million. The rules have shifted through consultation and it's worth reading through the new tax rule changes for SMSFs if your balance is anywhere near the threshold.
Frequently Asked Questions
Can I salary sacrifice into my SMSF?
Yes. Salary sacrifice works the same whether your super is with a retail fund, industry fund or SMSF. Your employer redirects an agreed portion of your pre-tax salary into the fund's bank account, and it counts as a concessional contribution against your $32,500 cap for 2026-27. You need a written salary sacrifice agreement in place before the income is earned (not retrospectively), and your employer needs your SMSF's bank details and electronic service address for SuperStream. If you're new to trustee life, our SMSF setup guide covers the mechanics of getting the fund ready to receive employer contributions.
What's the maximum I can contribute in a single year?
Assuming under 75 and TSB below the relevant thresholds, the theoretical maximum in 2026-27 is $32,500 concessional plus $390,000 non-concessional (triggering the three-year bring-forward), totalling $422,500. Add unused concessional carry-forward from prior years if your TSB was under $500,000 on 30 June 2026 and that number climbs further.
Do employer contributions count toward the concessional cap?
Yes. Super Guarantee, salary sacrifice and personal deductible contributions all count against the same $32,500 cap. It's the combined total that matters, not each source individually.
What is Division 293 tax?
An extra 15% tax on concessional contributions for members whose combined income and concessional contributions exceed $250,000 in a financial year. It doesn't stop you contributing, it just doubles the entry tax on the portion above the threshold. The ATO issues the assessment separately after you lodge your personal return.
Can I still contribute after 75?
Only mandated employer contributions (like SG) and downsizer contributions after the 28th day of the month following your 75th birthday. Voluntary personal contributions and salary sacrifice generally can't be accepted.
Does the bring-forward rule reset?
Yes, but only after the three-year period ends. Once you've triggered it, you're locked into that three-year window (or two-year, depending on your TSB at trigger). After the window closes, you're back to the annual cap and can trigger a new bring-forward if you're still eligible.
What happens to unused carry-forward after 5 years?
It expires. Unused concessional cap from 2020-21, for example, is available to use up to and including 2025-26. If you don't use it by 30 June 2026, it's gone. The five-year clock runs on a rolling basis, so the oldest year drops off each 30 June.
Not sure where you stand on your caps this year? Talk it through with an SMSF specialist.
If your TSB is close to $500,000, you've had a big income year, or you're worried you've already gone over a cap, book a free consultation before the next lodgement.
References
- ATO Key superannuation rates and thresholds
- ATO Concessional contributions cap
- ATO Non-concessional contributions cap
- ATO Personal super contributions
