What is a director penalty notice?

A notice from the ATO that can make a company director personally liable for the company’s PAYG withholding, super guarantee charge and GST debts. A lockdown notice, issued where required lodgments were never made, leaves no option but payment in full. A non-lockdown notice, issued where lodgments were made but payment was not, gives 21 days to pay or appoint a voluntary administrator, small business restructuring practitioner or liquidator.

What happens if I pay superannuation late?

If super is not paid in full, on time and to the correct fund, the employer becomes liable for the super guarantee charge and must lodge a super guarantee statement with the ATO. The charge exceeds the original super amount and, unlike ordinary super contributions, is not tax deductible.

Do I have to use Single Touch Payroll?

Yes. Single Touch Payroll reporting is mandatory for employers and must be lodged electronically each pay cycle using approved payroll software.

Can Oxley Partners help if I have already received a notice from the ATO?

Yes. Call the practice on 02 4868 6100 as soon as a notice arrives — several of these notices have short, strict deadlines and the available options narrow considerably once they pass.

Specialist practice

Employment & payroll compliance

Paying people correctly is only half of it. The reporting that sits behind payroll carries real consequences when it slips.

Managing and reporting the employee and payroll functions of a business is a significant part of running one. As well as making sure everyone is paid correctly, there are reporting obligations that carry serious consequences if they are not completed accurately and on time.

Employers who understand and keep on top of these requirements maintain a fair and lawful workplace and avoid costly penalties. Staying proactive and informed is the whole game — almost every problem we are asked to fix began as a deadline that passed quietly.

The obligations

What payroll compliance actually requires

Correct pay rates

Wages that comply with the Fair Work Act, the National Employment Standards and the relevant modern award or enterprise agreement.

Superannuation guarantee

The minimum percentage of ordinary time earnings paid into each employee’s fund, in full, on time and to the right fund.

PAYG withholding

Withholding the correct tax from gross wages, remitting it to the ATO and reporting it through your activity statements.

Single Touch Payroll

Mandatory reporting of salaries, wages, PAYG withholding and super to the ATO each pay cycle, through approved software.

Rates and thresholds for superannuation guarantee and PAYG withholding change from year to year. We confirm the current figures against your payroll each quarter rather than assuming last year’s settings still apply.

When it goes wrong

What the ATO can enforce

These are cumulative. A single missed quarter can attract the charge, the interest and the penalty at once.

Super guarantee charge: Payable when super is late, short or paid to the wrong fund. It is more than the super you would have paid, and it is not tax deductible.
General interest charge: Applied automatically to unpaid amounts and compounding daily. Remission can be requested where there were extenuating circumstances.
Failure to lodge penalties: Imposed where activity statements or returns are lodged late, separately from any interest on the underlying debt.
Director penalty notices: Can make a director personally liable for PAYG withholding, super guarantee charge and GST. Immediate action is essential once one is issued.
Garnishee notices: Direct a bank or a debtor holding your money to pay it to the ATO instead, reducing the debt without your involvement.
Recovery action: In serious cases, escalating to statutory demands and winding-up proceedings.

Common questions

Questions we are asked most

What is a director penalty notice?: A notice from the ATO that can make a company director personally liable for the company’s PAYG withholding, super guarantee charge and GST debts. A lockdown notice, issued where required lodgments were never made, leaves no option but payment in full. A non-lockdown notice, issued where lodgments were made but payment was not, gives 21 days to pay or appoint a voluntary administrator, small business restructuring practitioner or liquidator.
What happens if I pay superannuation late?: If super is not paid in full, on time and to the correct fund, the employer becomes liable for the super guarantee charge and must lodge a super guarantee statement with the ATO. The charge exceeds the original super amount and, unlike ordinary super contributions, is not tax deductible.
Do I have to use Single Touch Payroll?: Yes. Single Touch Payroll reporting is mandatory for employers and must be lodged electronically each pay cycle using approved payroll software.
Can Oxley Partners help if I have already received a notice from the ATO?: Yes. Call the practice on 02 4868 6100 as soon as a notice arrives — several of these notices have short, strict deadlines and the available options narrow considerably once they pass.

If a notice has already arrived, the timeframes are short and strict. Call the practice on 02 4868 6100 before responding to it.