This means that where an employer is a company, and the company fails to comply with their obligations under the PAYG system, or under the SCG provisions, a company director can be held personally liable for the amount that the company should have paid.

1. Director liability for company’s non-compliance –
employee obligations

3. All employers have certain obligations to fulfill in relation to
employee wages and in particular an employee’s taxation and
superannuation liabilities. Employers would know that they
are required to withhold money from wages under the pay as
you go (PAYG) system under the Income Tax Assessment Act
1997, but also that they must pay a superannuation
guarantee charge (SGC) on behalf of an employee, under
theSuperannuation Guarantee (Administration) Act 1992.

4. This means that where an employer is a company, and the
company fails to comply with their obligations under the PAYG
system, or under the SCG provisions, a company director can
be held personally liable for the amount that the company
should have paid.

6. In certain circumstances, the ATO can force directors of a
company that are unwilling or unable to meet their
obligations, to personally pay those debts. This is achieved
with the issue of a director penalty notice for an amount
equal to these amounts.

7. If you are seeking advice about an employer’s
obligations to employees, or directors’ liabilities
for non-compliance of obligations to employees,
please contact our office and speak with one of
our experienced practitioners.
Adrian Bambrick
Mobile: 0439 981 969
Email: adrian@bambricklegal.com.au