A Director Penalty Notice landed today
A Director Penalty Notice (DPN) gives you 21 days from the date the notice was posted to take one of four actions. Whether you can still avoid personal liability depends on when your company reported its PAYG withholding, GST and super guarantee charge.
Three things to do right now
- 1
Open the envelope. Note the date the notice was posted.
The 21-day clock runs from the posting date, not the day you opened it. Write the deadline down somewhere you'll see it daily.
- 2
Call the Small Business Debt Helpline on 1800 413 828.
Free, specialist financial counsellors who handle DPN cases all day. They will help you work out which type of DPN it is, what realistic options exist, and how to triage the next few days.
- 3
Get all outstanding BAS lodged, and pay what you can of any super.
Late lodgement of these returns is what converts a non-lockdown DPN into a lockdown one. Even if you can't pay, lodging the returns preserves your options.
Key facts (checked October 2026)
- 21 days from postage
- The 21-day clock starts on the date the notice was posted to your residential address on the ASIC register — not the day you opened it. Source: ATO Director penalty regime.
- Two types of DPN
- A non-lockdown DPN gives you four options to remit. A lockdown DPN means the personal penalty is already locked. For PAYG withholding and GST that happens when they were reported more than three months after the due date. For super on wages paid up to 30 June 2026, it happens if the super guarantee charge was reported after its due date at all. Then only paying the debt in full clears it.
- Joint and several
- All directors at the time the liability arose are each personally liable for the full amount. Resigning does not retroactively remove liability.
- Volumes up sharply
- In 2024–25 the ATO issued more than 84,000 DPNs to directors of about 64,000 companies, a 136% increase on the year before (Tax Ombudsman). You're not alone in this.
The longer version
Step 1 — Identify the type of DPN.
The DPN itself does not always state 'non-lockdown' or 'lockdown'. Use our DPN decision tool, or call SBDH. The test differs by liability. For PAYG withholding and GST, it is whether the amounts were reported within three months of the due date. For super on wages paid up to 30 June 2026 there is no three-month window: the charge must have been reported by its due date. If yes, you have four options; if not, the super penalty is locked. For paydays from 1 July 2026, the penalty locks for any super guarantee charge not covered by a voluntary disclosure statement lodged within 60 days of payday and before the ATO assesses the company. An earlier ATO assessment brings that date forward. Ask SBDH if you're not sure which applies.
Step 2 — If non-lockdown, choose between four options within 21 days.
The options are: (1) pay the debt in full; (2) appoint an administrator under Part 5.3A; (3) appoint a Small Business Restructuring Practitioner under Part 5.3B if the company is eligible; or (4) appoint a liquidator. Choosing one of options 2–4 within 21 days remits the personal penalty for the unpaid amount. Doing nothing means the personal penalty crystallises.
Step 3 — If lockdown, focus on the personal position.
The personal penalty cannot be remitted by appointing an administrator. The ATO says paying the company's debt in full is the only way to remit it. A payment arrangement can manage the debt but doesn't remove the penalty. A registered liquidator or financial counsellor should walk you through it.
Step 4 — Do not ignore further ATO correspondence.
If 21 days lapses without action on a non-lockdown DPN, the ATO can commence recovery proceedings against you personally — including garnishee notices. Engagement preserves options that silence destroys.
Who to call
Free or low-cost. Independent of creditors. Checked October 2026.
Small Business Debt Helpline
Free, confidential, specialist financial counselling for sole traders and small business owners — tax debt, BAS, supplier pressure, insolvency options.
Free, specialist DPN-aware financial counselling. Start here today.
ASIC — Find a Registered Liquidator
The official ASIC search for registered liquidators and small business restructuring practitioners. Verify any practitioner you're considering, before paying any fee.
If options 2, 3, or 4 are in play, this is the official register for verifying any practitioner you speak to.
Australian Small Business and Family Enterprise Ombudsman
Federal statutory ombudsman for small business. Free assistance with disputes against other businesses or government, plus a Tax Concierge for ATO matters.
If the underlying tax matter is in dispute, ASBFEO's Tax Concierge can help with ART matters.
Beyond Blue NewAccess for Small Business Owners
Free six-session mental health coaching for small business owners under stress. Coaches have small business backgrounds. No GP referral required.
Coaching support while you navigate it. Free, six sessions, coaches with small business backgrounds.
Lifeline Australia
24/7 crisis support and suicide prevention. Phone, text, or chat. Free, confidential.
If the pressure is overwhelming, call before doing anything else. 24/7.
We do not refer to commercial debt-relief operators.
Every service we point you to is free or low-cost, government-funded or not-for-profit, and independent of creditors. If a paid operator is offering to negotiate your ATO debt or run a Part IX agreement for a fee, talk to the Small Business Debt Helpline first — 1800 413 828, free.
Prefer to talk to someone?
Mental health support is free, confidential, and one tap away.
Frequently asked questions
- How long do I have to act on a Director Penalty Notice?
- Twenty-one days from the date the ATO posted the notice to your residential address as it appears on the ASIC register. The clock does not start from when you opened it. If you have only just discovered an old notice, call the Small Business Debt Helpline on 1800 413 828 the same day.
- What is the difference between a non-lockdown and a lockdown DPN?
- A non-lockdown DPN gives you 21 days to choose between paying, appointing a voluntary administrator, appointing a Small Business Restructuring Practitioner, or appointing a liquidator — any of those four remits the personal penalty. Whether a DPN is non-lockdown depends on the liability. PAYG withholding and GST are non-lockdown if the amounts were reported within three months of the due date. For super on wages paid up to 30 June 2026 there is no three-month window: it is non-lockdown only if the super guarantee charge was reported by its own due date. Reported later than that, or never, and the super penalty is locked — paying the company's liability in full is the only thing that clears it. One DPN can carry both: a remittable PAYG portion and a locked super portion.
- Can I avoid personal liability by resigning as a director?
- No. A director remains personally liable for unpaid amounts that arose during their term. Resigning does not retroactively remove liability — and a new director who resigns within the 30-day window may still be liable for amounts that were due before their appointment.
- What if there are multiple directors?
- Each director at the time the liability arose is jointly and severally personally liable for the full amount. The ATO can pursue any one of you for the entire debt and let you sort out contribution between yourselves.
- Is professional advice expensive?
- The first conversation with the Small Business Debt Helpline (1800 413 828) is free. Initial conversations with registered liquidators and SBR practitioners are commonly free; fees apply once you formally appoint them. Do not pay an unregistered 'debt consultant' to negotiate this — call SBDH first.
- Does the 21-day clock pause if I'm overseas or ill?
- No. The 21-day period runs from the date of posting regardless. If you have a genuinely exceptional circumstance, raise it with the ATO and a registered practitioner immediately — but do not assume the clock has paused.
Sources
- ATO — Director penalty regime
- ATO Annual Report 2024-25 — DPN volumes
- ASIC — Small Business Restructuring under Part 5.3B
- Tax Ombudsman — Review of the ATO's administration of Director Penalty Notices
TEKVA provides information, not financial counselling or legal advice. Use this page as a starting point, then talk to a free specialist. The Small Business Debt Helpline is 1800 413 828.
This can get clearer from here.