New directors and the 30-day director penalty rule

A new director has 30 days from their appointment to deal with any unpaid PAYG withholding, GST or super guarantee charge the company already owes. If, within those 30 days, the company does not pay the amount, appoint a voluntary administrator, appoint a small business restructuring practitioner, or begin to be wound up, the new director becomes personally liable for those earlier debts, even though they arose before they joined. The 30 days run from the day of appointment, whether or not a director penalty notice (DPN) has been issued.

How the 30-day rule works

1. Day 1 is your appointment. The 30 days are calendar days, so weekends and public holidays count.
2. Within 30 days, one of four things must happen: the company pays the amount in full, appoints a voluntary administrator, appoints a small business restructuring practitioner, or begins to be wound up.
3. If none happens, you become liable for the director penalty on the unpaid amounts from before your appointment. The ATO can then issue you a DPN, and the usual 21-day rules apply to that notice.

An example

This example is based on one the ATO gives:

If the new director had done nothing within the 30 days, they would have become liable for the unpaid $4,000.

Lockdown rules for new directors

For PAYG withholding and GST that were due before you joined, the ATO applies a version of the 3-month reporting test that runs from your appointment:

• amounts reported within 3 months of your appointment can be remitted by payment, administration, small business restructuring or winding up; but
• amounts reported 3 months or more after your appointment, or never reported, can only be remitted by paying them in full. Amounts the ATO has estimated are treated as never reported.

The ATO’s guidance gives no equivalent new-director rule for super guarantee charge: super guarantee charge that was reported late or not at all can only be remitted by payment in full. Super rules also changed when Payday Super started on 1 July 2026, so check any super periods with an adviser. See lockdown vs non-lockdown DPNs.

What to check before or straight after you join

• Whether the company has any unpaid or unreported PAYG withholding, GST or super guarantee charge. This is the ATO’s own advice to new directors.
• The company’s lodgement history for activity statements and super, and whether any periods are overdue.
• The company’s current ATO balance and any payment plan in place. A payment plan does not remit a director penalty.
• Whether the company can pay its debts as they fall due. If it cannot, see insolvent trading and safe harbour.
• Your address on the ASIC register. The ATO only needs to post a DPN to that address.

Resigning within the 30 days

Resigning quickly does not guarantee you avoid liability. The ATO says a new director who resigns within 30 days may still be liable for the company’s unpaid PAYG withholding, GST or super guarantee charge. See DPN after resigning as a director.

Defences still apply

The three defences to a director penalty are available to new directors too, including where you took all reasonable steps to make sure one of the four outcomes happened.

Common questions

Am I liable for ATO debts from before I became a director?

You can be. If the company still has unpaid PAYG withholding, GST or super guarantee charge from before your appointment, you become personally liable for it unless, within 30 days of your appointment, the company pays it, appoints an administrator or small business restructuring practitioner, or begins to be wound up.

When do the 30 days start?

On the day you are appointed as a director. They are calendar days, so weekends and public holidays count.

Do I need to receive a DPN for the 30 days to run?

No. The 30 days run from your appointment whether or not the ATO has sent you anything. A DPN is how the ATO later recovers the penalty.

If I resign within 30 days, am I off the hook?

Not necessarily. The ATO says a new director who resigns within 30 days may still be liable for the company’s unpaid PAYG withholding, GST or super guarantee charge.

Can lodging overdue BAS help a new director?

Yes. For PAYG withholding and GST that were due before you joined, reporting them within 3 months of your appointment keeps the wider remission options open. Amounts reported later, or estimated by the ATO, can only be remitted by payment in full.

Sources: Taxation Administration Act 1953 (Cth) Schedule 1, Division 269; 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.