Non-concessional contributions include:

• personal contributions made by the member for which no tax deduction has been claimed
• excess concessional contributions for the financial year where the member does not elect to remove them from the fund after the ATO sent them an excess contributions determination.

Non-concessional contributions don’t include:

• super co-contributions
• structured settlements
• downsizer contributions
• orders for personal injury or capital gains tax related payments that the member has validly elected to exclude from their non-concessional contributions
• re-contribution of COVID-19 early release superannuation amounts made between 1 July 2021 and 30 June 2030.

If a member’s non-concessional contributions exceed their cap and the member elects to retain their excess non-concessional contributions and associated earnings in super, a tax of 47% is levied on the excess contributions. Individual members will receive a determination explaining their options.

If a member’s non-concessional contributions exceeds their cap they will receive a determination explaining their options and will have 60 days to make an irrevocable choice.

The default position is for the member to elect to release an amount from the SMSF equal to the excess non-concessional contribution plus 85% of the associated earnings.

A release authority will be issued to the SMSF to pay the amount to the ATO, and the associated earnings will be included in the member’s income tax return and taxed at their marginal tax rate with a 15% tax offset applied.

Alternatively, the member may elect to retain their excess non-concessional contributions and associated earnings in the SMSF.

In this circumstance a tax of 47% will be levied on the amount and the SMSF will be issued with a release authority to pay the tax liability amount to the ATO.

Generally, non-concessional contributions made into your SMSF do not form part of the SMSF's assessable income.