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The new financial year is not just a calendar reset. From 1 July 2026, a series of legal changes have taken effect that directly affect every company director in Australia. Payday Super is now enforceable law. The ATO begins its post-EOFY enforcement cycle. ASIC’s first-quarter scrutiny of insolvency appointments lifts. If you directed a company through a difficult FY2026, now is the time to act — not in September when the letters start arriving.
This is general information only and is not legal advice. You should obtain professional advice specific to your circumstances.
Key Takeaways
- Payday Super is law from 1 July 2026 — employers must pay super on the same day as wages or face penalties. Directors face personal liability for unpaid SGC amounts.
- ATO begins its post-EOFY enforcement cycle — Director Penalty Notices are issued after EOFY lodgments are assessed. The window to voluntarily address ATO debts is narrow.
- June quarter BAS is due 28 July 2026 — lodgment failures after this date can trigger lockdown DPNs.
- ASIC’s Q1 enforcement — historically the busiest quarter for insolvency-related enforcement actions against directors.
- Small Business Restructuring — if your company was struggling at EOFY, Part 5.3B restructuring must be accessed while you are still solvent or borderline — not after the threshold is crossed.
1. Payday Super Is Now Law — What Directors Must Know
From 1 July 2026, Payday Super requires employers to pay Superannuation Guarantee (SG) contributions on the same day — or within one business day — of paying wages. This is a fundamental shift from the previous quarterly payment model.
For directors, the personal liability implications are serious:
- Director Penalty Notices (DPNs) apply to unpaid SG from Day 1. Under section 269 of the Superannuation Guarantee (Administration) Act 1992 (Cth), the ATO can issue a DPN for unpaid SGC amounts. From 1 July, those amounts accrue every pay cycle — not every quarter.
- Lockdown DPNs. If the SG charge (SGC) amount is not reported (lodged) within 30 days of the due date, the DPN becomes a “lockdown” DPN. Lockdown DPNs cannot be avoided by placing the company into administration or liquidation. The director pays personally.
- The SGC penalty rate is 10% of the unpaid amount per annum, plus a General Interest Charge. These accumulate quickly under Payday Super’s pay-period cycle.
What to do now: Review your payroll system. Confirm that super is being processed and paid on payroll date. If your company uses a payroll bureau, verify their Payday Super configuration. If you have legacy unpaid SG from FY2026, address it now — a voluntary disclosure and payment arrangement with the ATO is always better than waiting for a DPN.
2. The ATO Post-EOFY Enforcement Cycle Begins
July to September is historically the ATO’s most active enforcement quarter. Here is what triggers enforcement activity after EOFY:
a) BAS for the June Quarter Is Due 28 July 2026
The Business Activity Statement (BAS) for the April to June 2026 quarter is due on 28 July 2026. Failure to lodge by this date can have serious consequences:
- The ATO may issue a lockdown Director Penalty Notice for PAYG withholding and SGC amounts not reported within 30 days of the due date.
- A lockdown DPN means personal liability for the director that cannot be extinguished by placing the company into administration or liquidation.
- Failure to Lodge (FTL) penalties apply — currently $313 per 28-day period per lodgment, up to a maximum penalty (larger companies face higher multiples).
What to do now: Confirm your BAS lodgment is on track. If you use a registered tax agent, verify they are managing the June quarter lodgment. If your company had PAYG withholding or SGC arrears in FY2026, your accountant needs to address these before 28 July.
b) ATO Debt Collection Intensifies in July–September
The ATO’s Small Business and Individuals compliance program runs intensively in the first quarter of the new financial year. After processing EOFY lodgments, the ATO identifies:
- Companies with outstanding debt from FY2026 that were given informal payment arrangements during the year
- Companies that lodged late or did not lodge at all
- Companies where the tax gap (difference between reported and actual liability) is material
- Companies in industries ASIC and the ATO have flagged as high-risk for FY2027 (construction, hospitality, labour hire)
Critically, the ATO’s DPN crackdown that began in FY2026 — which saw more than 84,000 DPNs issued, a 136% increase — is expected to continue into FY2027. The Tax Ombudsman’s review of DPN practices (released in 2026) confirmed the ATO intends to maintain this pace of enforcement.
3. ASIC’s Q1 Enforcement Pattern — What Directors Must Understand
ASIC’s enforcement activity in relation to directors follows a recognisable quarterly pattern. After EOFY, ASIC:
- Reviews reports lodged by newly appointed liquidators. When a company goes into liquidation, the liquidator must lodge a report with ASIC under section 533 of the Corporations Act 2001 (Cth) if they suspect a breach by a director. The volume of new liquidation appointments in the months following EOFY means that Q1 is when ASIC receives and acts on a significant proportion of these reports.
- Acts on accumulated referrals from the ATO. The ATO refers directors of failed companies to ASIC where tax debts are outstanding and the director has not complied with DPN obligations. These referrals crystallise post-EOFY.
- Issues disqualification notices under section 206F of the Corporations Act for directors who have been associated with two or more failed companies within a seven-year period. The threshold is administrative — no court order is required. ASIC simply issues the notice.
In FY2026, ASIC disqualified over 20 directors under section 206F, up from historical averages. The trend is upward.
4. If Your Company Was Struggling at EOFY: Act Now, Not in September
One of the most damaging mistakes directors make is waiting for the enforcement letters before seeking legal advice. If your company was trading in marginal solvency at 30 June 2026, now — not in September — is when you need to act.
a) Small Business Restructuring Under Part 5.3B
Small Business Restructuring (SBR) under Part 5.3B of the Corporations Act 2001 (Cth) allows eligible companies to propose a restructuring plan to creditors while remaining under director control. To be eligible:
- Total liabilities must be $1 million or less (excluding employee entitlements in certain circumstances)
- The company must be insolvent or likely to become insolvent
- Employee entitlements (including SG amounts) must be paid up to date
- The director must not have used the SBR process or voluntary administration in the prior seven years
The SBR process has a high creditor approval rate and, crucially, preserves director control. It can be initiated at any time — but waiting until after ATO enforcement action has started can remove the option entirely (a lockdown DPN, for example, cannot be extinguished by an SBR appointment).
b) Safe Harbour: Activate It Now
Section 588GA of the Corporations Act provides a safe harbour from insolvent trading liability where a director:
- Takes a course of action reasonably likely to lead to a better outcome for the company than immediate administration or liquidation
- Has properly paid employee entitlements (including SG contributions)
- Has met tax lodgment obligations
Safe harbour does not activate automatically. You must document your course of action, obtain professional advice, and keep contemporaneous records. A director who enters the new financial year with a marginal company and takes no documented steps to improve its position cannot rely on safe harbour if a liquidator later pursues them for insolvent trading.
If your company was on the edge at 30 June, speak to an insolvency lawyer today about activating safe harbour properly.
5. The Director’s July Checklist
Here is a practical checklist for every company director in the first weeks of the new financial year:
- ✅ Confirm Payday Super processing is active and your payroll system is paying super on payroll date from 1 July onwards
- ✅ Confirm June quarter BAS is on track for lodgment by 28 July 2026 — contact your accountant immediately if there are arrears
- ✅ Review your ATO debt position — if you have an informal payment arrangement, confirm it is still active and payments are being made
- ✅ Check DPN status — if you received a DPN in FY2026, verify whether it was lockdown or non-lockdown, and whether you have complied with the response obligations
- ✅ Review solvency — if your company cannot meet its debts as and when they fall due, document this formally and seek legal advice about your options (SBR, safe harbour, voluntary administration)
- ✅ Check ASIC records — confirm director IDs, addresses, and company officer records are current via ASIC Connect
- ✅ Employee entitlements paid — confirm no unpaid leave, superannuation, or termination pay is outstanding
Frequently Asked Questions
What happens if I don’t pay super under Payday Super?
If you fail to pay SG contributions on the same day as wages (or within one business day), the ATO may issue a Superannuation Guarantee Charge (SGC) assessment, which includes the unpaid SG amount plus a 10% interest charge and an administration fee. If the SGC is not reported within 30 days of the due date, the ATO can issue a lockdown Director Penalty Notice — making you personally liable for the amount regardless of whether the company is later placed in administration or liquidation.
Can ASIC disqualify me as a director without going to court?
Yes. Under section 206F of the Corporations Act 2001 (Cth), ASIC can administratively disqualify a director for up to five years if, within any seven-year period, they were an officer of two or more companies that were wound up with liquidators reporting to ASIC that the companies were insolvent. No court proceeding is required — ASIC issues the notice directly. You have the right to make written submissions before the notice is issued, and to challenge the decision in the Administrative Review Tribunal.
Is Small Business Restructuring still available if I have ATO debts?
Yes, but only if employee entitlements (including superannuation) are up to date at the time of appointment. ATO tax debts can be included in the restructuring plan and voted on by creditors. However, if the ATO holds a lockdown DPN, that personal liability remains regardless of the SBR process — the DPN debt is personal to the director, not a company debt.
When is the best time to activate safe harbour?
As early as possible. Safe harbour must be activated before the company is unable to pay its debts — ideally at the first sign of financial difficulty. A director who waits until the company is clearly insolvent before taking structured steps may find that safe harbour is not available because the “better outcome” course of action can no longer be meaningfully pursued. Early professional advice is the key. At Boss Lawyers, we regularly advise directors on safe harbour activation, documentation requirements, and the interaction between safe harbour and formal insolvency processes.
What is a lockdown Director Penalty Notice?
A lockdown DPN is issued when a company has failed to lodge its BAS or SGC return within 30 days of the due date. Unlike a non-lockdown DPN (which can be extinguished by appointing an administrator or liquidator), a lockdown DPN makes the director personally and irrevocably liable for the amount — administration and liquidation will not help. The only way to extinguish a lockdown DPN is to pay the underlying debt or have the assessment remitted by the ATO.
Get Advice Before the Enforcement Letters Arrive
The new financial year is the moment when the consequences of FY2026’s decisions start to materialise. Directors who act early — addressing ATO arrears, activating safe harbour, considering restructuring — have far more options available to them than those who wait for the DPN or the liquidator’s claim letter.
Boss Lawyers acts for directors in commercial disputes, insolvency proceedings, and regulatory enforcement matters across Queensland. If you are concerned about your position as a director entering FY2027, call us on 1300 267 711 or contact us online for a confidential consultation.
→ Insolvency Lawyers Brisbane | → Director Disputes | → ATO Director Penalty Notice Guide 2026 | → Small Business Restructuring Guide
This article was written by Mark Harley, Principal Solicitor at Boss Lawyers Pty Ltd (ABN 38 143 136 645), Level 27 Santos Place, 32 Turbot Street, Brisbane QLD 4000. Call 1300 267 711. This is general information only and is not legal advice. You should obtain professional advice specific to your circumstances.
