What is the ATO SMSF Supervisory Levy?

The ATO supervisory levy is a fee charged by the Australian Taxation Office (ATO) to help fund the cost of regulating SMSFs and, according to them, to help educate SMSF trustees on their SIS compliance obligations.

How Much is the ATO Levy?

The Levy is $259 and has been unchanged since the 2015 financial year.

When is the Levy Charged?

The Levy is payable in advance. It is paid when your SMSF Tax Return is lodged and just forms part of the net tax payable. If your fund has a tax agent, the SMSF annual return is due on 15 May of the following year except for newly registered funds which are due 28 February for your first-year lodgment. A SMSF is still obligated to pay the levy regardless of its tax liability being nil. Alternatively, if the fund is due a tax refund the levy is deducted from the refund and the net is either returned to the fund or is payable by the fund.

Do I Receive a Levy Adjustment for My Newly Registered Self-Managed Super Fund?

There is an adjustment to the annual levy if your SMSF is newly registered and it is the fund’s first year of operation. A new SMSF pays a double levy in its first year of operation which is $518. If a fund is newly registered but has no transactions in its first year and lodges a ‘return not necessary’ no levy is payable, but an adjustment is made in the following year when it first starts to operate i.e. a bank account is opened and contributions are made.

Do I Receive a Levy Adjustment in the Financial Year I Wind up My SMSF?

Conversely, in the financial year a SMSF is being wound up an adjustment is made to the annual ATO Levy to reduce the SMSF levy to nil.

Is My SMSF Penalised if Its Annual Return is Lodged Late?

From the 1 July 2023 onwards, failure to lodge your tax return incurs a penalty of $313 per one unit for a period of 28 days with a maximum limit of $1,565. General interest charges (GIC) are applied to the late payment of the tax liability which includes an amount payable due to the ATO levy. GIC is charged from the due date the fund’s tax return was required to be lodged.

Does My SMSF Receive a Tax Deduction for the ATO SMSF Supervisory Levy?

Yes a SMSF is entitled to claim a tax deduction when it pays the SMSF supervisory levy to  the ATO. Regardless of a fund being in pension mode and expenses relating to earning exempt current pension income (ECPI) are not tax deductible the ATO levy is tax deductible in full as it is specifically deductible under a separate tax provision.

The Key Takeaways

• a SMSF must pay the supervisory levy to the ATO annually which is $ 259 since the 2015 financial year
• a newly established self managed superannuation fund is required to pay $518 in its first financial year of operation which includes the levy paid in advance for the following financial year
• the supervisory levy is payable even if the SMSF has no tax liability
• the SMSF is not required to pay a supervisory levy in the financial year it is wound up