Payroll tax on fees and payments to directors

As a company, you are liable for payroll tax on wages paid or payable to your company directors.

A company director includes a member of the governing body of your company.

Directors wages include:

• superannuation contributions
• shares or options
• employment termination payments
• directors fees
• any other amount paid or payable by a company as remuneration to a working or non-working director of that company.

Professional partnerships

Partners in a professional practice may be appointed as directors of a client company or a public company. Directors fees paid to these partners must also be included by the client company or public company as wages, even if the:

• partnership (of which the director is a partner) has a partnership agreement that requires any fees received by partners as directors of client companies or public companies to be paid to the partnership
• directors fees are paid to the partnership of which the director is a partner, rather than to the director or partner.

Also consider...

• Read the public ruling on termination payments (PTA004).
• Learn more about calculating payroll tax.
• Read about taxable wages for payroll tax.