Directors fees

Kellie Malmberg
Kellie Malmberg Member Posts: 2 Novice Member Novice Member
Hello,
What is the best way to set up Directors Fees as a new payroll item? How do you set this up so it records on the PAYG Payment Summary correctly, as the ATO says that this should be shown at Item 2 on your individual Tax Return.

Comments

  • Bruce
    Bruce Member Posts: 447 Professional Partner Professional Partner
    edited June 2020
    Set them up the same way you would for regular salaries - i.e. deduct PAYG, pay sup'n, attract payroll tax etc.
    Just allocate them to a separate account line "Directors Fees" so that they are easily identifiable on your P&L
  • Kellie Malmberg
    Kellie Malmberg Member Posts: 2 Novice Member Novice Member
    edited May 2020
    Great, thank you for your help Bruce.
  • Zappy
    Zappy Accredited Partner Posts: 5,252 Accredited Partner Accredited Partner
    edited June 2020
    Kellie, directors fees are NOT payroll items. For example, are they having PAYG withheld? Are they paying super on these "fees"? Typically these are classed as drawings, not wage and salary income. 
  • Zappy
    Zappy Accredited Partner Posts: 5,252 Accredited Partner Accredited Partner
    edited May 2020
    Yeah, Bruce, are you sure about that? 
  • Bruce
    Bruce Member Posts: 447 Professional Partner Professional Partner
    edited May 2020
    Kevin
    Most definitely - PAYGW issue in this link https://www.ato.gov.au/business/business-activity-statements-(bas)/pay-as-you-go-(payg)-withholding/

    I should have said
    • Payroll Tax - yes if Victoria, not sure about other states
    • Sup'n - yes unless employee has exemption due to aggregate supn contributions being greater than the concessional limit
  • Bruce
    Bruce Member Posts: 447 Professional Partner Professional Partner
    edited May 2020
    Kevin, Kellie
    see my response to Kevin's comment above
  • Zappy
    Zappy Accredited Partner Posts: 5,252 Accredited Partner Accredited Partner
    edited May 2020
    Excellent Bruce. I am always wary of giving tax advice on a Reckon Forum. It's not really what its here for. 
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