Who must pay company PAYG/GST/SG or face Director Penalty Notice (DPN)?

Directors personally liable for unpaid company PAYG, GST + SG via DPN regime.

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).

Applies when the business has an incorporated company.

How the regulator frames it: Company directors.

What triggers it: Company PAYG/GST/SG remaining unpaid + reported (or unreported) beyond statutory windows.

Jurisdiction: Commonwealth law, so the test is the same in every state and territory.

Outcome across the 35 industries Rules Mate maps (35 of 35: depends on size or structure).

The answer is the same in every industry: depends on size or structure. Industry does not change who must comply.

Size does not change the answer across all industries: at every size band the answer is "depends on size or structure".

Each line is one run of the Rules Mate applicability engine for a single business profile, with the reason the engine gives:

• Pty Ltd company in real estate agents with 6–19 employees, turnover $1M–$3M: applies. Incorporated company (Corporations Act)
• Sole trader in real estate agents with 6–19 employees, turnover $1M–$3M: does not apply. Requires an incorporated company.

When due

Standard DPN: respond within 21 days. Lockdown DPN: liability already crystallised.

Frequency

When a triggering event occurs

Evidence to keep

Cash flow forecasts, board minutes, professional engagement (insolvency practitioner).

Status

Current

Priority

Critical

Maximum penalty: Personal liability for full unpaid amounts + interest.

Rules Mate has not yet classified the audit or assurance level for this obligation. Any audit, review or certification requirement is set by the regulator source listed below.

If this obligation applies to you, so do these 5: the engine uses the same rule for each.

• Lodge the ASIC annual company statement and review fee
• Comply with directors' general law and statutory duties
• Prevent insolvent trading (s 588G)
• Pay ASIC fees + lodge prescribed forms
• Discharge of directors' duties — practical evidence

• Australian Business Number (ABN) application: Entities carrying on an enterprise in Australia need an ABN — without one, payers must withhold 47% PAYG from your payments. How to apply and who's eligible.
• Lodge Business Activity Statements at assigned frequency: GST-registered entities must lodge a BAS monthly, quarterly or annually as the ATO assigns.
• Make trustee resolutions for trust distributions by 30 June: Discretionary trust trustees must validly resolve to distribute trust income before the end of the FY.
• TASA Code Determinations from 1 August 2024: Tax practitioner code reformed via Code Determinations — false + misleading statements + supervision + breach reporting.
• Withhold PAYG from employee and contractor payments: Employers must withhold tax from wages, certain contractor payments + report via STP / BAS.

Across the 1,890 business profiles Rules Mate evaluates, these obligations apply to most of the businesses this one applies to, and are far more common among them than among businesses generally:

• Maintain auditor / financial reporting (Chapter 2M): applies to 58% of the same businesses (4.5× the overall rate)
• Comply with corporate whistleblower protections (Part 9.4AAA Corporations Act): applies to 58% of the same businesses (4.5× the overall rate)
• Beneficial ownership transparency (Tranche 3 — under consultation): applies to 100% of the same businesses (4.5× the overall rate)

Rules Mate tracks 37 published obligations tagged "tax", 6 of them rated critical. For a professional services Pty Ltd company with 6–19 employees operating in every state, 7 of those apply outright. This obligation is rated critical priority, and is triggered by events.

Regulated by Australian Taxation Office.

ATO: Federal tax administrator covering income tax, GST, PAYG, FBT, superannuation guarantee, STP, and self-managed super funds. Also administers the Director ID regime via ABRS.

• Australian Taxation Office

TAA: General tax administration — PAYG withholding (Sch 1 Pt 2-5), STP, Director Penalty Notice regime (Sch 1 Subdiv 269-B), assessment + objection process, penalties + general interest charge.

• Taxation Administration Act 1953

Free tools that help with this obligation:

• GST registration scope
• FBT calculator
• Director ID checker