Lockdown vs non-lockdown director penalty notices

A non-lockdown director penalty notice (DPN) can be remitted within 21 days by paying the debt, appointing a voluntary administrator, appointing a small business restructuring practitioner, or beginning to wind up the company. A lockdown DPN can only be remitted by paying the debt in full. Whether an amount is locked down depends on when the company reported it to the ATO, not on whether it was paid.

The difference at a glance

What counts as reporting

Reporting means lodging the activity statement that shows the PAYG withholding and GST, or lodging the super guarantee charge statement. It is separate from paying. A company that lodges on time but cannot pay keeps the non-lockdown options open for those amounts.

If the company did not lodge and the ATO estimated the amount instead, the estimate is treated as unreported. A DPN based on an estimate is therefore a lockdown notice for those amounts.

Super guarantee and Payday Super

For super guarantee charge, the test is whether the super guarantee charge was reported by the date the law requires, rather than the 3-month rule that applies to PAYG withholding and GST. The super rules changed when Payday Super started on 1 July 2026, so the relevant date depends on the period. Check each super period on your notice with an adviser.

How to tell which one you have

1. Read the remission options on the notice. The notice sets out how the penalty can be remitted for the amounts it lists.
2. List every period on the notice. For each one, note the due date and the date the company actually lodged.
3. Compare the dates. PAYG withholding or GST lodged more than 3 months after the due date, or never lodged, is locked down.
4. Check the lodgement history. Your tax agent or the ATO’s Online services for business can show when each statement was lodged.

One notice can cover several periods, and each period has its own status. Our 21-day DPN calculator shows the last day to act.

If your notice is non-lockdown

You have four ways to remit the penalty, and each must happen within 21 days of the notice:

• pay the amount in full;
• appoint a small business restructuring practitioner (eligibility conditions apply);
• appoint a voluntary administrator; or
• begin winding up the company, for example through a creditors’ voluntary liquidation.

Which one fits depends on whether the business can continue. After the 21 days, these options no longer remit the penalty, and the ATO can recover it from you personally, for example by garnishee notice, by offsetting credits owed to you, or through court proceedings. A payment plan is not one of the four options: see does a payment plan cancel a DPN?

If your notice is lockdown

Only payment remits the penalty. Every payment the company makes towards the debt also reduces the penalty, and a director who pays the penalty has a right to recover that amount from the company and, in some cases, a contribution from the other directors.

Administration, restructuring or liquidation will not remove your personal liability for locked-down amounts, but one of them may still be the right step for the company and its other creditors. The defences below also still apply.

Defences apply to both kinds

The law allows limited defences to a director penalty, including where:

• because of illness or another good reason, you did not take part in managing the company during the relevant time;
• you took all reasonable steps to make sure the company paid, appointed an administrator or restructuring practitioner, or began to be wound up, or there were no such steps you could reasonably have taken; or
• for super guarantee charge and GST, the company treated the law as applying in a way that was reasonably arguable.

You will need evidence to support a defence, so get advice early.

New and former directors

A new director becomes liable for unpaid amounts if they are still unpaid 30 days after the director’s appointment. Resigning does not end liability for amounts that fell due while you were a director. See our main director penalty notice guide for more.

Common questions

What is a lockdown director penalty notice?

A lockdown DPN covers PAYG withholding or GST the company did not report to the ATO within 3 months of the due date, or super guarantee charge it did not report by the required date. A lockdown penalty can only be remitted by paying the amount in full.

Can liquidation or administration remit a lockdown DPN?

No. Appointing a voluntary administrator or small business restructuring practitioner, or winding up the company, does not remit lockdown amounts. It may still be the right step for the company, but you remain personally liable for the locked-down amounts unless a defence applies.

If we lodge the overdue BAS now, does the DPN stop being lockdown?

No. Once the 3-month point has passed, lodging late does not change the status of those amounts. Lodging now still matters, because it protects future periods and is needed for small business restructuring and safe harbour.

Can one DPN include both lockdown and non-lockdown amounts?

Yes. Status is worked out period by period, so one notice can list amounts of each kind. Check every period on the notice.

When do the 21 days start?

From the date of the notice, not the day you open it. A notice posted to your address on ASIC’s register is treated as given even if you did not see it straight away.

Sources: Taxation Administration Act 1953 (Cth) Schedule 1, Division 269, including sections 269-15, 269-25, 269-30, 269-35, 269-40 and 269-45; Australian Taxation Office, Director penalty regime (last updated 16 April 2026). This page is general information, not advice about your circumstances. Last reviewed: 9 October 2026.