Density-functional theory is used to model interstitial iron and its complexes with aluminum in Si-rich SiGe alloys with Ge concentration up to 8%. Both short-range and long-range defect-Ge interactions are considered. It is found that Fe prefers Si-rich regions. The shifts of the electrical levels of Fe-acceptor pairs are calculated using the marker method. (C) 2008 Elsevier Ltd. All rights reserved.