Don’t Miss the 30 June Deadline: Ensuring Concessional Contributions Are Paid on Time to Your Managed Super Fund

As the end of the financial year approaches, it’s crucial for individuals and employers to review their superannuation strategies, especially when it comes to concessional contributions. These contributions offer valuable tax benefits, but timing is critical when your super is held in a managed or retail super fund.

If your fund does not receive concessional contributions by 30 June, they won’t count towards your contributions cap for that year, potentially costing you tax savings and retirement growth opportunities.

What Are Concessional Contributions?

Concessional contributions are before-tax contributions made to your super fund. These include:

• Employer contributions (including Super Guarantee and salary sacrifice)
• Personal deductible contributions (claimed as a tax deduction)

They are taxed at 15% in the fund (or 30% for high-income earners), which is typically lower than your marginal tax rate. This makes them a tax-effective way to boost your retirement savings.

The annual concessional contributions cap for 2024–25 is $27,500.

Why Timing Matters with Managed Super Funds

Unlike SMSFs where you control transaction timing, managed super funds rely on administrative systems and cut-off processing times.

To be counted in the 2024–25 financial year, your contribution must be received and allocated by your fund before midnight on 30 June, not just sent or initiated.

Common issues that can delay contributions:

• Bank transfers made close to 30 June may not clear in time.
• Clearing houses (e.g. ATO’s Small Business Superannuation Clearing House) can take up to 10 business days to process payments.
• Payment methods like BPAY and EFT may have internal fund cut-off times, so check in advance.

Tips to Ensure Your Contributions Count This Year

1. Make Personal Contributions Early
   Aim to contribute by mid-June to ensure enough time for clearance and allocation.
   
2. Liaise with Your Super Fund
   Each fund has its own cut-off dates. Contact them to confirm their deadlines.
   
3. Use Fast Payment Methods
   BPAY is usually processed faster than other methods. Avoid cheques or third-party deposits.
   
4. Monitor Employer Contributions
   Check that salary sacrifice and SG payments are up to date. If needed, ask your employer to bring forward June payments.
   
5. Confirm Receipt with the Fund
   Don’t assume the payment is processed. Log in to your account and confirm it’s been received and recorded.

Consequences of Missing the Deadline

If a contribution isn’t processed by 30 June:

• It won’t count towards this year’s concessional cap.
• You lose any personal tax deduction you intended to claim.
• It may trigger excess contributions tax in the next financial year if it pushes you over the cap.

Final Thoughts

Timing your concessional contributions right is essential to maximising your superannuation tax benefits and avoiding exceeding your annual caps. Managed funds require early action to account for processing delays.

Do you need help meeting the 30 June deadline for your concessional super contributions?

The Sharp Accounting team can help you review your strategy, avoid delays, and maximise your super tax benefits. Get in touch with us today to make sure your contributions count this financial year.