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ying a director

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I run a small company and my wife and I are the only two directors.  I would like to start paying ourselves a lump sum annually as directors remuneration.  I have a few questions about tax implications: 

1. Are these payments fully deductable?

2. Are there PAYG obligations or would we simply report payments in our personal tax returns?

3, Are there employer superannuation contribution payment liabilities?

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Hi @RJMH04,

 

Thanks for your patience whilst we checked information regarding your query with a specialist area!

 

In response to your queries:

  1. Yes. Payment of director fees to directors of a company is tax deductible to the company.
  2. Yes. There are PAYG implications. Director's fees are mostly treated similar to employee income. PAYG is required to be withheld from the gross director's fees, reported on the IAS or BAS that is used to report the salary and wages and related PAYG W for that period, and should be remitted to the ATO. These PAYGW and superannuation contributions are subject to reporting and payment by the standard deadlines that apply for all other employees.
  3. Yes. There are superannuation liabilities in the company in paying you director's fees. You can find more information about working out if you have to pay super on our website.

If you have further questions, you can phone us on 13 28 61 between 8am - 6pm, Monday to Friday to speak with an operator.

 

Thanks, JodieH.

2 REPLIES 2
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Community Support

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Hi @RJMH04,

 

Welcome to our Community!

 

We're checking some information about your query with a specialist area and we hope to get back to you with further information as soon as possible.

 

Thanks, JodieH.

Highlighted

Most helpful response

ATO Certified Response

Community Support

Replies 0

Hi @RJMH04,

 

Thanks for your patience whilst we checked information regarding your query with a specialist area!

 

In response to your queries:

  1. Yes. Payment of director fees to directors of a company is tax deductible to the company.
  2. Yes. There are PAYG implications. Director's fees are mostly treated similar to employee income. PAYG is required to be withheld from the gross director's fees, reported on the IAS or BAS that is used to report the salary and wages and related PAYG W for that period, and should be remitted to the ATO. These PAYGW and superannuation contributions are subject to reporting and payment by the standard deadlines that apply for all other employees.
  3. Yes. There are superannuation liabilities in the company in paying you director's fees. You can find more information about working out if you have to pay super on our website.

If you have further questions, you can phone us on 13 28 61 between 8am - 6pm, Monday to Friday to speak with an operator.

 

Thanks, JodieH.