Directors fees

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

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

Great, thank you for your help Bruce.

Zappy

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

Yeah, Bruce, are you sure about that?

Bruce

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

Kevin, Kellie
see my response to Kevin's comment above

Zappy

Excellent Bruce. I am always wary of giving tax advice on a Reckon Forum. It's not really what its here for.