Super contributions cap

Before you make or accept any contributions into your SMSF, you need to understand the super contribution caps.

Contributions are payments to your super fund to save for your retirement.

These can be from your employer or payments you make yourself.

They could be in cash or non-cash forms.

There are limits or caps on how much you can contribute each year before you have to pay extra tax.

The limit and how much extra tax you have to pay depends on your age and whether the contributions are concessional or non-concessional.

Concessional contributions are employer and salary sacrifice contributions as well as contributions you make personally where you claimed a tax deduction. These are taxed at 15 per cent in your fund.

Non-concessional contributions are contributions you make personally where you have not claimed a tax deduction. These are not taxed in your super fund.

Check the ATO website for current contribution caps.

As a trustee, you need to know there is a limit on the amount your fund can accept in a single contribution from a member.

If the member is over 65, the limit is the amount of the non-concessional contributions cap.

If they’re under 65, the limit is three times that.

If a member goes over the single contribution limit, you must return the excess amount within 30 days.

Meet Greg. Greg’s fund accepted a contribution from him that was over the single contribution limit.

The fund did not return the excess amount as required.

The fund trustees will be fined thousands of dollars and as an individual Greg will have to pay extra tax!

Other rules may apply to your contributions so you may want to speak to SMSF Options to make sure you get it right

For more SMSF information, take a look at our other videos – or contact us here