Director Tax Declaration
A Director Tax Declaration is a document where a company director provides their Tax File Number and payment details to the business. It ensures the company withholds the correct amount of tax under the Income Tax Assessment Act 1997 and reports accurately to the ATO.
A formal declaration used by company directors to provide details of their income, fringe benefits, and other payments for tax and superannuation reporting purposes to the ATO.
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About this Document
A Director Tax Declaration is an important administrative document used in Australian businesses to ensure that payments made to directors are correctly recorded for tax and superannuation obligations. This guide explains what the document is, why it matters, and how to use it correctly in your business. In Australia, the Tax Office Administration Act 1953 and the Income Tax Assessment Act 1997 set out the rules for how businesses must report income. Directors of companies are often treated differently to standard employees. They may receive a salary, wages, or director fees. Sometimes they receive fringe benefits. You must report these amounts correctly to the Australian Taxation Office or ATO. Failure to report correctly can lead to penalties and interest charges. This document helps you gather the necessary information from your director to meet those legal obligations. You need a Director Tax Declaration when you pay a director fees, wages, or allowances. It is also required when you need to withhold tax from payments to a director. The declaration provides the tax file number or TFN of the director. It tells you if the director is an Australian resident for tax purposes. It helps you determine how much tax to withhold. The declaration supports Single Touch Payroll or STP reporting. STP is a system that reports tax and super information to the ATO directly from your payroll software. All employers must use STP. The information from the declaration feeds into this system. Under the Fair Work Act 2009, directors who are also employees have specific entitlements. However, often directors are not on the standard payroll. Their payments might be treated as non-employee payments. In these cases, the rules for withholding tax change. You might need to use the No ABN withholding or variations. A Director Tax Declaration clarifies the status of the payment. It helps you decide if you treat the director as an employee for PAYG withholding purposes. If the director does not provide a TFN, you must withhold tax at the highest rate. The current top marginal rate plus Medicare levy applies. This avoids the director having a tax debt at the end of the year. The Superannuation Guarantee or SG rules also apply to directors. The Superannuation Guarantee Administration Act 1992 requires you to pay super contributions for eligible employees. This often includes directors who receive salary or wages. You must pay super at least four times a year. The declaration helps you calculate the superable amount. It confirms if the director is under 18 or over 70, which affects eligibility. You must keep these records for five years. The ATO can ask to see them during an audit. ASIC also requires companies to keep proper financial records. A Director Tax Declaration is part of your record keeping obligations under the Corporations Act 2001. This Act ensures companies maintain accurate financial records. The declaration proves you have exercised due diligence in your reporting. Work health and safety or WHS laws indirectly relate to this documentation. Proper payroll records ensure that insurance premiums for workers compensation are calculated correctly. Each state has its own WHS authority. For example, Safework NSW or Worksafe Victoria. Accurate records help you comply with their insurance reporting requirements. To complete a Director Tax Declaration, you need the full legal name of the director. You need their residential address. You need their TFN. You need their tax file number declaration if they are an employee. You need to know if they are a resident or foreign resident for tax purposes. You need to list the types of payments they will receive. This includes salary, wages, director fees, allowances, and fringe benefits. The form must be signed and dated by the director. A false declaration can result in prosecution. There are common mistakes to avoid when handling these documents. Do not treat all directors the same. Check if they are an office holder or an employee. Do not forget to report fringe benefits. Fringe Benefits Tax or FBT applies if you provide non-cash benefits like cars or entertainment. The FBT Assessment Act 1986 covers these rules. You must separate these from wages. Another mistake is not updating the declaration when circumstances change. If a director becomes a foreign resident, the withholding rate changes. You must update your payroll system immediately. Small business owners often confuse a Director Tax Declaration with a Tax File Number Declaration. They are different but related. A TFN declaration is for standard employees. A Director Tax Declaration captures broader information specific to company office holders. It often includes details about dividends and trust distributions if the structure is complex. For tradespeople running their own company, this is vital. You might set yourself up as a director to take profits out of the business. You must declare these withdrawals correctly. You cannot just take money from the business bank account without recording it. That is illegal. It creates tax liabilities and messes up your accounts. The declaration helps you justify the payments as legitimate business expenses. This makes them tax deductible for the company. If you do not have the paperwork, the ATO may disallow the deduction. This means the company pays more tax. Legislation such as the Income Tax Assessment Act 1997 allows deductions for salaries and wages paid to employees and directors. But only if they are actually paid and incurred in gaining or producing assessable income. The declaration is evidence of this. Privacy is also a consideration. The Privacy Act 1988 regulates how you handle personal information. You must keep the TFN and address details secure. Only authorized staff should access them. Do not send this information via unencrypted email. Use secure payroll software. When you set up your payroll, link the Director Tax Declaration to the employee or director profile. This ensures the correct tax scale applies. The ATO publishes tax tables. These tables show how much to withhold based on weekly earnings and residency status. You must use the latest tables. They change every year in the federal budget. ASIC regulates the conduct of directors. Directors have duties under the Corporations Act 2001 to act in good faith and in the best interests of the company. Properly declaring income is part of these duties. It ensures transparency. If a director hides income, they are breaching their duties. This can lead to civil penalties or disqualification from managing companies. In summary, a Director Tax Declaration is a key compliance tool. It links the payments made by the company to the personal tax obligations of the director. It ensures the correct amount of tax goes to the ATO. It ensures superannuation is paid correctly. It keeps the company compliant with ASIC, Fair Work, and WHS record keeping standards. Every Australian business with a company structure should use this document when paying directors. It reduces risk. It saves time at tax time. It provides clarity for the director and the business. Use plain English when explaining the form to your directors. Make sure they understand what they are signing. Keep a copy in their personnel file. Update it when their details change. By following this guide, you can manage your tax obligations with confidence.
Key Facts
- Companies must withhold tax from payments to directors unless the director provides a valid Tax File Number.— Taxation Administration Act 1953 (Cth)
- Director fees are subject to Superannuation Guarantee contributions if they are paid for services rendered.— Superannuation Guarantee Administration Act 1992 (Cth)
- Records of tax declarations must be kept for five years to meet ATO record keeping requirements.— Income Tax Assessment Act 1997 (Cth)
- Companies must report director payments to the ATO through Single Touch Payroll.— Tax Administration Act 1953 (Cth)
- Directors have a legal duty to ensure the company complies with tax laws.— Corporations Act 2001 (Cth)
Sources
Required Sections
Company Details
This section collects the full legal name, ABN, ACN, and contact information of the company employing the director.
Company Details
Company Name
Enter the full legal name of the business. This must match the name registered exactly with the Australian Securities and Investments Commission (ASIC). You cannot use a trading name here. If you operate as a sole trader or partnership, write your personal legal names or the registered partnership name. This section establishes the legal entity responsible for the tax obligations outlined in this declaration.
Australian Business Number (ABN)
Record the 11-digit Australian Business Number. The ABN is a unique identifier for your business. If your company is registered for the Goods and Services Tax (GST), you must include the ABN on tax invoices and other business documents to claim GST credits. Under the A New Tax System (Australian Business Number) Act 1999, providing an incorrect ABN can result in payments being withheld at the highest marginal rate. Verify the number on the Australian Business Register before you sign.
Australian Company Number (ACN)
If the entity is a company, you must enter the 9-digit Australian Company Number issued by ASIC. This field is mandatory for corporations. You generally cannot use an ACN instead of an ABN on tax invoices unless you were issued an ACN before the ABN system started and have not updated your records. If your company name does not include its ACN, you are legally required by the Corporations Act 2001 to display the ACN on all public documents and negotiable instruments. This ensures your business can be identified for legal and regulatory purposes.
Principal Place of Business (Physical Address)
Provide the street address, not a post office box. This must be the main location where you conduct your business or keep your business records. This address is for determining the tax jurisdiction relevant to your operations.
If you work as a tradesperson or run a mobile business, use your home address if that is where you manage your administration. If you manage your business from a vehicle, you must provide the residential address of the responsible person. This requirement ensures the Australian Taxation Office (ATO) can verify your location and contact you if necessary. It also impacts your obligations under state and territory local laws, such as council rates and land tax, and ensures compliance with the Income Tax Assessment Act 1997.
Director Identity and Contact
This section records the full name, residential address, date of birth, and contact details of the director.
Section 1: Director Identity and Contact Details
1.1 Full Legal Name You must enter your full legal name exactly as it appears on your current driver licence or passport. Do not use nicknames, abbreviations, or trading names. The Australian Securities and Investments Commission (ASIC) requires this information to verify your identity and your role as a director. If you have changed your name recently and your identification documents do not match, you must provide details of your change of name certificate.
- Given Names: [e.g., John James]
- Surname: [e.g., Smith]
1.2 Residential Address ASIC requires you to provide a residential address for the public register. This address must be the place where you usually live. It cannot be a Post Office box, a locked bag, or a document delivery service. If you run your business from a different site, or if you work from a shed separate to your home, you must list your primary dwelling here.
Under Section 127 of the Corporations Act 2001, a company must have a proper record of where its directors live. This ensures legal documents can be served to you personally if necessary. If you are concerned about privacy, you can request that ASIC suppress your residential address from the public record by lodging a Form 484, but you must still provide the address here.
- Street Address: [Number and street name]
- Suburb / Locality: [e.g., Richmond]
- State: [e.g., VIC]
- Postcode: [e.g., 3121]
1.3 Primary Phone Number Provide a mobile number that you use daily. The Australian Taxation Office (ATO) and other government bodies often use SMS or phone calls to verify your identity quickly. It is your responsibility to ensure that the voicemail on this number is set up and working. If a tax agent or legal representative needs to contact you urgently regarding your tax obligations, they will use this number.
- Phone: [e.g., 0412 345 678]
1.4 Email Address You must provide a current and secure email address. This will be the main channel for receiving digital tax notices, activity statements, and updates from the ATO. Ensure you check this inbox regularly. Using a shared email address for multiple businesses can cause confusion and lead to missed deadlines. By providing this address, you confirm that you have the authority to access it.
- Email: [e.g., name@example.com]
Declaration I declare that the details provided above are true and correct. I understand that providing false or misleading information to the Australian Taxation Office is a serious offence under the Taxation Administration Act 1953.
- Director Signature: __________________________
- Date: DD / MM / YYYY
Tax File Number and Residency
This section captures the TFN and the tax residency status of the director to determine withholding rates.
Tax File Number and Residency
Tax File Number (TFN)
Provide your Tax File Number in the field below. Providing your TFN is voluntary. If you do not provide it, we must withhold tax from any payments at the top marginal rate plus the Medicare levy. This rate is significantly higher than the standard rate applied to your income.
If you do not quote a TFN, we must withhold 47 percent of your payment. This rule is set out in Schedule 1 to the Taxation Administration Act 1953.
If you provide your TFN, we will withhold tax based on the information you provide in your tax file number declaration. This ensures you pay the correct amount of tax throughout the financial year.
Australian Residency for Tax Purposes
Tick the box below if you are an Australian resident for tax purposes. Being an Australian resident for tax purposes is not the same as being an Australian citizen or holding a permanent visa. It is a question of where you live and your connections to Australia.
Under the Income Tax Assessment Act 1936, you are an Australian resident for tax purposes if any of the following apply.
- The Resides Test. You reside in Australia. We look at your intentions, family, business and employment ties, and the maintenance and location of your assets.
- The Domicile Test. Your permanent home is in Australia.
- The 183-Day Test. You are present in Australia for more than half the income year, unless your usual place of abode is outside Australia and you do not intend to take up residence here.
- The Commonwealth Superannuation Test. You are a member of the Commonwealth superannuation scheme or a contributor to the scheme.
If you are an Australian resident, you must declare your worldwide income to the Australian Taxation Office (ATO). This includes income from overseas jobs, foreign investments, and foreign pensions.
If you are a foreign resident for tax purposes, you generally only pay tax on income earned from Australian sources. The tax-free threshold does not apply to foreign residents for tax purposes. If you tick this box and you are actually a foreign resident, you may underpay your tax and incur penalties from the ATO. The Income Tax Assessment Act 1997 outlines the specific tax rates that apply to foreign residents.
If you leave Australia or return to Australia permanently, your residency status for tax purposes may change. You must update your details with us immediately. If you are unsure about your residency status, visit the ATO website or seek advice from a registered tax agent.
Tax File Number
[_________________________]
Australian Residency for Tax Purposes
I am an Australian resident for tax purposes. [ ] Yes [ ] No
Payment Structure
This section details the type of payments the director will receive, such as salary, wages, fees, or allowances.
Payment Structure
Select the payment type you receive from the company and enter the specific amount. You must record these values in Australian dollars. Do not include cents.
Director Fees Enter the total gross amount of director fees payable for the income year. The Australian Taxation Office (ATO) treats director fees as income for tax purposes, even if you leave the money in the company account. You must report these fees in your individual tax return. The company must withhold pay as you go (PAYG) income tax from these payments under the Taxation Administration Act 1953. If you do not provide a Tax File Number (TFN), the company must withhold tax at the top marginal rate.
Salary and Wages Enter the gross salary amount before any tax deductions. If you work as an employee of the company in addition to being a director, you might receive a salary. This payment must meet the requirements of the Fair Work Act 2009. You must ensure the salary aligns with any relevant Modern Award or enterprise agreement that applies to your trade or industry. The company pays superannuation guarantee contributions on top of this amount under the Superannuation Guarantee (Administration) Act 1992.
Allowances Enter the total value of allowances paid for specific work related purposes. This includes amounts for tools, travel, or uniforms. You must only receive an allowance if you spend the money on deductible work expenses. Under Income Tax Assessment Act 1997 (ITAA 1997), you must declare the full amount of the allowance as assessable income. You can then claim a deduction for the actual expense you incurred. You cannot automatically claim the allowance as a deduction just because you received it. Keep receipts or records for every expense to prove your claim to the ATO.
Superannuation Contributions Confirm if the company will make superannuation contributions on top of the payments listed above. Directors are eligible employees for superannuation guarantee purposes. The company must pay a minimum percentage of your ordinary time earnings into a complying superannuation fund. You must provide the company with your super fund details and your Tax File Number. The Superannuation Industry (Supervision) Act 1993 sets the rules for these funds. The company must pay these contributions quarterly to avoid the Superannuation Guarantee Charge.
Dividends Do not include dividend payments in this section. You declare company dividends separately on your personal tax return. Dividends are distributions of company profits and are not subject to PAYG withholding in the same way as salary or director fees.
Superannuation Fund Choice
This section gathers the details of the director's nominated superannuation fund for contributions.
Superannuation Fund Choice
Under the Superannuation Guarantee (Administration) Act 1992, you have the right to choose which superannuation fund receives your employer contributions. This is known as Superannuation Fund Choice. As a Director, your company acts as your employer. If you are an employee director, the company must pay the Superannuation Guarantee into a complying superannuation fund of your choice. You must provide the fund details to ensure your money reaches the correct account without delay.
Please complete the fields below accurately. If you do not choose a fund, your company may pay your super contributions into their default fund or a fund nominated under the relevant industrial award.
Fund Details
Super Fund Name Write the full registered name of your superannuation fund. Do not use abbreviations. Check the welcome pack from your fund or your latest annual statement to find the exact legal name.
Australian Business Number (ABN) The ABN is a unique 11 digit number that identifies your super fund. You can find the ABN on the fund’s website or by searching the Australian Business Register. Your employer cannot make contributions to a fund that does not have a valid ABN.
Unique Superannuation Identifier (USI) The USI is a key identifier used by the Superannuation Data and Payment (S DaP) system. Every APRA regulated fund and Self Managed Super Fund (SMSF) now has a USI. You must provide this number for your company to pay you via SuperStream. You can find the USI on your super fund’s website or in your Member annual statement. If you are unsure, contact your super fund directly.
Member Number Your Member Number is the unique identifier allocated to your account within the specific super fund. It is usually located on the top of your member card or annual statement. It is not your Tax File Number (TFN). Providing the correct Member Number ensures your contributions are not lost or allocated to a "Unclaimed Monies" account. If you are a new member and have not yet received a Member Number, contact your fund to obtain one before you sign this form.
Self Managed Super Funds (SMSF) If you choose an SMSF, you must provide the ABN of the SMSF. You also must provide a valid Electronic Service Address (ESA), also known as a Message ID, so the company can send the data and payment electronically. The SMSF trust deed must allow the company to make contributions.
Tax File Number (TFN) While not listed in the table above, you may provide your TFN to the fund separately. Providing your TFN is voluntary. However, if you do not provide it, your super fund may take extra tax from your contributions at the highest marginal rate. Under the Taxation Administration Act 1953, funds are authorised to collect TFN data for these purposes.
Declaration and Signatures
This section contains the legal declaration and the signature of the director authorising the tax treatment.
Declaration and Signatures
I declare that the information provided in this document is true and correct. I confirm that I have fulfilled all my obligations as a director regarding the taxation affairs of the business. I acknowledge that I am responsible for ensuring the company meets its tax and superannuation liabilities under Australian law.
By signing below, I verify that I have authorised the Australian Taxation Office (ATO) to communicate with the registered tax agent listed in this document for the purpose of managing the company’s tax affairs. I understand that this authority remains in effect until I revoke it in writing.
I accept the duties outlined in the Taxation Administration Act 1953 and the Income Tax Assessment Act 1997. I confirm that the business has registered for an Australian Business Number (ABN) and Tax File Number (TFN) if required, and that all activity statements and lodgements are up to date. I also confirm that the company is compliant with the Superannuation Guarantee (Administration) Act 1992 and that employee superannuation contributions have been paid on time and in full.
I understand the penalties for providing false or misleading information to the ATO. Under the Criminal Code Act 1995, providing false information to the Commonwealth is a serious offence. I acknowledge that the ATO can impose penalties for failing to lodge on time or for failing to pay tax and superannuation liabilities by the due dates.
I declare that all financial records, including invoices, receipts, and bank statements, have been kept for the minimum period required by law, which is generally five years. These records are available for inspection if requested by the ATO.
I understand that as a director, my personal details may be used to verify my identity and to update ATO records. I acknowledge the importance of keeping my contact details current to ensure I receive important notices regarding the company's tax status.
Director Signature
Full Name
Please print your full legal name.
Date
Witness Name
Witness Signature
Date
Frequently Asked Questions
What is a Director Tax Declaration?
When do I need a Director Tax Declaration?
Is a Director Tax Declaration legally required in Australia?
What happens if a director does not provide a TFN?
Do I pay super on director fees?
How does Single Touch Payroll affect Director Tax Declarations?
Can a director be a foreign resident for tax purposes?
Where do I store the Director Tax Declaration?
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