Pay company PAYG/GST/SG or face Director Penalty Notice (DPN)
Directors personally liable for unpaid company PAYG, GST + SG via DPN regime.
Who must comply
Company directors.
What triggers it
Company PAYG/GST/SG remaining unpaid + reported (or unreported) beyond statutory windows.
When due
Standard DPN: respond within 21 days. Lockdown DPN: liability already crystallised.
Evidence required
Cash flow forecasts, board minutes, professional engagement (insolvency practitioner).
Max penalty
Personal liability for full unpaid amounts + interest
Who must comply with this? The applicability test by industry, business structure and size.
Summary
Under Subdivision 269-B Schedule 1 Taxation Administration Act, the ATO can issue a Director Penalty Notice making directors personally liable for unpaid company PAYG withholding, GST + SG. Two types: 'standard' DPN (can be remitted by paying or entering liquidation/admin within 21 days), 'lockdown' DPN (personal liability locks in if reporting overdue >3 months).
Enforced by
Source legislation
Entity types
Topics
Related
- CWLTHApply for a Director Identification Number (Director ID)Every director needs a Director ID before appointment — apply via ABRS.
- CWLTHLodge Business Activity Statements at assigned frequencyGST-registered entities must lodge a BAS monthly, quarterly or annually as the ATO assigns.
- CWLTHPrevent insolvent trading (s 588G)Directors must prevent the company incurring debts while insolvent — or face personal liability.
- CWLTHMake trustee resolutions for trust distributions by 30 JuneDiscretionary trust trustees must validly resolve to distribute trust income before the end of the FY.
- CWLTHWithhold PAYG from employee and contractor paymentsEmployers must withhold tax from wages, certain contractor payments + report via STP / BAS.
- CWLTHComply with directors' general law and statutory dutiesDirectors owe duties of care and diligence (s 180), good faith (s 181), no improper use of position (s 182) or information (s 183).
Frequently asked questions
- Who must comply with company PAYG/GST/SG or face Director Penalty Notice (DPN)?
- Company directors.
- What triggers company PAYG/GST/SG or face Director Penalty Notice (DPN)?
- Company PAYG/GST/SG remaining unpaid + reported (or unreported) beyond statutory windows.
- When is company PAYG/GST/SG or face Director Penalty Notice (DPN) due?
- Standard DPN: respond within 21 days. Lockdown DPN: liability already crystallised.
- What is the maximum penalty for company PAYG/GST/SG or face Director Penalty Notice (DPN)?
- Personal liability for full unpaid amounts + interest
- What evidence is required for company PAYG/GST/SG or face Director Penalty Notice (DPN)?
- Cash flow forecasts, board minutes, professional engagement (insolvency practitioner).
Source: https://www.ato.gov.au/businesses-and-organisations/preparing-lodging-and-paying/. Rules Mate is not a law firm. Always verify against the live regulator source before acting.