For business owners with variable income, super contributions are often an afterthought, something dealt with in a rush in June rather than planned deliberately across the year. That approach usually means leaving genuine opportunity on the table, or worse, breaching a contribution cap without realising it until the ATO’s excess contributions notice arrives.
Concessional and Non-Concessional Contributions
Broadly, contributions fall into two categories, and understanding the distinction is the foundation for any sensible contribution strategy.
Concessional contributions include employer Superannuation Guarantee contributions, salary sacrifice contributions, and personal contributions you claim as a tax deduction. These are taxed at the concessional rate within the fund and count toward the concessional cap, which sits at $30,000 for the 2025-26 financial year and is set to rise to $32,500 from 1 July 2026.
Non-concessional contributions are made from after-tax money and count toward a separate cap, currently $120,000 for 2025-26, rising to $130,000 from 1 July 2026. Your non-concessional cap reduces to nil if your total super balance is at or above the general Transfer Balance Cap, which is $2 million for 2025-26 and $2.1 million from 1 July 2026, at the end of the previous financial year.
Both caps are indexed periodically in line with wage growth, and exceeding either can trigger additional tax and reporting obligations. This is one of the most common, and most avoidable, SMSF compliance issues we see.
Catch-Up Concessional Contributions
If your total super balance was under $500,000 at the end of the previous financial year, you may be able to carry forward unused concessional cap amounts from up to five previous financial years. For business owners who have had a genuinely strong year and want to bring forward a larger deductible contribution, this can be a valuable strategy, but it depends on eligibility and on your prior year contribution history being tracked accurately. It is also worth noting that unused amounts expire after five years, and any unused amount from 2020-21 will no longer be available to use from 1 July 2026.
Bring-Forward Non-Concessional Contributions
Similarly, the bring-forward rule can allow a larger non-concessional contribution across a shorter period, currently up to $360,000 across three years for eligible individuals in 2025-26, rising to $390,000 from 1 July 2026. This can suit business owners with a lump sum event, such as a property or business sale, that they want to direct into super in a single financial year rather than spreading it thinly across several.
Recontribution Strategies
A recontribution strategy, where a member withdraws a benefit and recontributes it as a non-concessional contribution, can in some circumstances be used to improve the tax components of a member’s balance ahead of retirement or for estate planning purposes, particularly where adult non-dependant beneficiaries are involved. This needs to be assessed carefully against a member’s individual circumstances, current caps, and total super balance.
Small Business CGT Concessions and Super
For business owners selling an eligible active business asset, the small business retirement exemption allows up to $500,000 per individual, as a lifetime limit, to be contributed to super outside the standard non-concessional cap. The 15-year exemption operates similarly but against a much larger lifetime CGT cap, currently $1,935,000 for 2026-27. These concessions are genuinely valuable, but the eligibility rules are complex, and strict timeframes apply.
Why Timing Matters More Than Most Trustees Think
Contributions need to be received by the fund, not just initiated, before the end of the financial year to count in that year. For business owners paying themselves irregularly, or making contributions close to 30 June, this timing detail catches people out more often than it should, particularly with electronic transfers that can take longer to clear than expected around the end of the financial year.
How New Wave SMSF Helps
Contribution planning works best when it is looked at alongside your business income, your personal tax position, and your fund’s existing caps and balances, not as a separate, once-a-year decision made under time pressure in June. Because our accounting and financial planning teams work from the same picture of your position, we help you plan contributions ahead of time, not react to them after the fact.
Frequently Asked Questions
What happens if I exceed my concessional contributions cap?
The excess amount is included in your assessable income and taxed at your marginal rate, with an additional excess concessional contributions charge applied to reflect the deferred tax.
Can I use both the carry-forward and bring-forward rules in the same year?
Potentially, yes, since they apply to different types of contributions, concessional and non-concessional respectively. Whether it makes sense depends on your total super balance, your age, and your broader financial position.
Does the small business CGT retirement exemption count toward my contribution caps?
No, amounts contributed under the small business retirement exemption or the 15-year exemption are excluded from your non-concessional contributions cap, up to the relevant lifetime limits, provided strict eligibility conditions and timeframes are met.
When do contributions need to be made to count for a financial year?
Contributions need to be actually received by your SMSF, not just initiated or instructed, before 30 June to count in that financial year.
What is the Total Super Balance threshold that affects my caps?
Several thresholds apply at different levels: $500,000 for catch-up concessional contributions eligibility, and the general Transfer Balance Cap, currently $2 million rising to $2.1 million from 1 July 2026, for non-concessional contribution eligibility.
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This article is general information only and does not take into account your personal objectives, financial situation, or needs. It does not constitute financial, tax, or legal advice. Contribution caps and thresholds referenced are current as at the date of publication and are subject to periodic indexation; please confirm current figures with your adviser before acting. New Wave Financial Planning Pty Ltd is an Authorised Representative of NWG Financial Services Pty Ltd, AFS Licence No. 538619. Please speak with your New Wave SMSF adviser before acting on any information in this article.