Lockdown director penalty notices: what a lockdown DPN means

A lockdown director penalty notice (lockdown DPN) is a DPN for company PAYG withholding, GST or super guarantee charge that wasn't reported to the ATO on time. For those amounts, putting the company into administration, small business restructuring or liquidation won't remit your personal penalty, and generally only paying the debt or establishing a defence will remove it.

A non-lockdown DPN leaves those insolvency options open for 21 days. One notice can contain both kinds of amount, so the first job is to work out which is which. For the wider DPN rules, see our director penalty notice lawyers page.

Lockdown vs non-lockdown DPN: what's the difference?

Directors must cause the company to pay its PAYG withholding, GST and super guarantee charge, or to appoint an administrator or small business restructuring practitioner, or to begin to be wound up (Taxation Administration Act 1953 (TAA), Sch 1 s 269-15). If, at the end of the due day, the company hasn't paid and none of those steps has happened, each director is liable to a penalty equal to the unpaid amount (s 269-20). That can include a director who resigned before the due day. Section references are to Schedule 1 of the TAA unless we say otherwise.

The penalty is remitted if the directors' obligation ends before the ATO gives the notice, or within 21 days after it (s 269-30(1)). The table shows how lockdown changes that.

Step the company takes within 21 days of the notice	Non-lockdown amounts	Lockdown amounts
Pays the debt in full	Penalty remitted	Penalty remitted
Appoints a voluntary administrator	Penalty remitted	No effect on the penalty
Appoints a small business restructuring practitioner	Penalty remitted	No effect on the penalty
Begins to be wound up	Penalty remitted	No effect on the penalty

The 21 days run from when the ATO posts or leaves the notice, not from when you read it (s 269-25(4)). The ATO can post it to your residential or business address as shown in ASIC's records (s 269-50), so an old address on the ASIC register generally won't stop time running. A copy sent to your tax agent doesn't change when the notice was given (s 269-52).

When is a DPN locked down?

It depends on the type of debt and whether the company told the ATO what it owed in time. Paying late doesn't lock a DPN down; reporting late does.

Debt	Locked down unless reported by	What counts as reporting
PAYG withholding	The last day of the 3 months after the due day	The activity statement (s 16-150) or Single Touch Payroll reporting (s 389-5)
GST on a tax period	The last day of the 3 months after the due day	Lodging the GST return (usually the BAS) for that period
Super guarantee charge	The due day for the charge (see below)	For wages paid from 1 July 2026, a voluntary disclosure statement for the QE day; for quarters ending on or before 30 June 2026, the SGC statement for the quarter

The ATO's practice statement PS LA 2011/18 (para 59) describes the rule in similar terms, but still treats super guarantee charge quarterly, as it worked before 1 July 2026.

PAYG withholding

PAYG withholding is locked down to the extent the company didn't notify it by that date, in the activity statement or through Single Touch Payroll (s 269-30(2), item 1). The second route is easy to miss: if the company reported withholding through its payroll software each payday, its PAYG withholding may not be locked down even though the BAS went in late.

GST

GST is locked down unless the company lodged its GST return for the period by the last day of the 3 months after the due day (item 5). If the return was lodged in time but understated the net amount, the lockdown applies to the difference between the net amount worked out from what the company gave the ATO by that date and its assessed net amount.

GST has been covered by the DPN rules for tax periods starting on or after 1 April 2020 (PS LA 2011/18, para 47). Penalties for GST instalments aren't affected by the lockdown rules (s 269-30(2), Note 3).

Super guarantee charge

Super guarantee charge has no three-month grace period. The company must report by the due day itself (item 3), and the concession for new directors described below doesn't apply.

Since Payday Super started on 1 July 2026, the charge is worked out for each "QE day", a day on which the company pays qualifying earnings to or for an employee (Superannuation Guarantee (Administration) Act 1992 (SGAA), s 17A(1)). For DPN purposes, the charge for a QE day is treated as due on the earlier of the first day after the 60-day period starting on the QE day and the day the ATO assesses the charge (TAA Sch 1 s 269-10(3); SGAA s 36(4)). The penalty is locked down except to the extent covered by a voluntary disclosure statement lodged by that day (s 269-30(2), item 3; SGAA s 33).

The ATO can assess the charge at any time, including on its own initiative (SGAA s 36(1)), so the lockdown date can arrive before the 60 days are up. A statement lodged on or after the day the ATO makes its assessment isn't a voluntary disclosure statement (SGAA s 33(2)), so disclose any shortfall as soon as you find it.

For quarters ending on or before 30 June 2026, the former rules still apply (Treasury Laws Amendment (Payday Superannuation) Act 2025, Sch 1, item 183). The charge for the quarter is treated as due on the day the company had to lodge its SGC statement, the 28th day of the second month after the quarter ended (for the June 2026 quarter, 28 August 2026). It is locked down unless the company lodged that statement by then, and if it did, to the extent the statement understated the charge (former s 269-10(3) and s 269-30(2), item 3). PS LA 2011/18 describes this due date as one month and 28 days after the end of the quarter (para 60, Table 1).

ATO estimates

The ATO can estimate the company's unpaid and overdue PAYG withholding, and its GST or super guarantee charge not yet assessed (usually because the company hasn't lodged), and give a DPN for the estimate (TAA Sch 1 s 268-10; s 269-10(4)). A penalty based on an estimate is locked down in full once the relevant date passes: 3 months after the PAYG withholding or GST return was due, or the day the super guarantee charge was due (s 269-30(2), items 2, 4 and 6).

An estimate can be reduced or revoked in limited ways, including by the company giving a statutory declaration of the real amount within 7 days after the ATO gives it notice of the estimate, or a longer period the ATO allows (s 268-40). That notice is also given when the ATO posts or leaves it (s 268-15(4)), so the window may have closed by the time a DPN arrives.

Why administration or liquidation no longer helps

The DPN rules aim to make a company either meet these obligations or go promptly into administration, restructuring or liquidation (s 269-5). Lockdown backs that up: the insolvency route protects directors only for amounts the company reported on time.

For amounts not reported by the lockdown date, an administration, restructuring or winding up that starts after that date has no effect on your penalty, whether it happens before the DPN or within the 21 days (s 269-30(2), Note 1). Liquidation may still be the right step for the company, and any amount the liquidator pays the ATO towards the debt reduces your penalty by the same amount (s 269-40). See director penalty notices after liquidation.

How do you know if your DPN is a lockdown DPN?

The notice must set out what the ATO thinks is the unpaid amount, state that you're liable to a penalty equal to it, and explain the main circumstances in which the penalty will be remitted (s 269-25(2)). One notice can cover several penalties (s 269-25(3)), so read the remission explanation against each period listed. Then check the dates yourself:

1. List every amount. Note each period, the type of debt (PAYG withholding, GST, super guarantee charge or an estimate) and its lockdown date under the tests above.
2. Check what was reported and when. Compare each lockdown date with the date the BAS or IAS, GST return, SGC statement or voluntary disclosure statement was lodged, and with any Single Touch Payroll reports. Your accountant can usually see the lodgment history in the ATO's online services.
3. Check your appointment date. A recent appointment can move the lockdown date (see below).

Lockdown turns on dates that can be checked, so the notice's description isn't the last word. The penalty also equals only the unpaid amount of the company's liability (s 269-20(5)), so raise any amounts already paid, or overstated estimates, with the ATO straight away.

A worked example

For example, suppose a company's BAS for the September 2025 quarter, due on 28 October 2025, shows PAYG withholding of $40,000 and GST of $60,000. The company reported its payroll through Single Touch Payroll each payday but didn't lodge the BAS until March 2026. The ATO posts a DPN to a director on 1 May 2026. All figures and dates are illustrative.

• Lockdown date. The last day of the 3 months after 28 October 2025 is 28 January 2026.
• PAYG withholding. If the Single Touch Payroll reports, made well before that date, covered the full $40,000 withheld, it is generally not locked down. An administration or winding up that begins within 21 days of 1 May 2026 would generally remit that part of the penalty.
• GST. The BAS was lodged after 28 January 2026, so the $60,000 is locked down. Administration or liquidation won't remit it, which leaves payment, a payment arrangement or a defence.

What can you do about a lockdown DPN?

Pay, in full or in part

If the company pays the debt in full within the 21 days, the penalty is remitted. Any amount paid by the company or a director reduces each related liability by the same amount (s 269-40). A director who pays has rights to recover from the company and to seek contribution from the other directors (s 269-45).

Rely on a defence

The three statutory defences apply to lockdown amounts too: illness or other good reason, all reasonable steps, and (for GST and super guarantee charge only) a reasonably arguable position taken with reasonable care (s 269-35). For the first two, if the ATO recovers any of the penalty outside court, you generally have only 60 days, starting when it gives you a copy of a garnishee notice or tells you in writing that it has recovered some of the penalty, to give it the supporting information (s 269-35(4A)). So it is usually better to raise a defence early. Our guide to defences to a director penalty notice explains each defence, the evidence and the 60-day rule.

Ask for a payment arrangement

The ATO may agree to let the company pay by instalments, but it has a discretion and doesn't have to (s 255-15). While an arrangement covering the company's debt is in force, the ATO can't start, or take a step in, court proceedings to recover the penalty from you (s 269-15(3)). It can still give you a DPN.

An arrangement doesn't remit the penalty or pause the 21 days, so the insolvency options for any non-lockdown amounts on the notice still close when the 21 days end. Because it doesn't change when the debt was due, general interest charge keeps accruing on the company's debt (s 255-15(2) and note). See payment plans for director penalty notices.

If you became a director recently

For PAYG withholding and GST, if you became a director during or after the 3 months, the 3 months are counted from the day you became a director (s 269-30(3)). The ATO reads this as meaning a new director isn't locked down if all required lodgments, including overdue ones, are made within 3 months of the appointment (PS LA 2011/18, para 61). For debts already overdue when you joined, the penalty arises only if the obligation is still unmet 30 days after your appointment (s 269-20(3) and (4)). See DPNs for new and resigned directors.

How we help

• Sort the amounts. We check each amount against the lodgment and payroll records and tell you which are locked down and when your 21 days end.
• Act on the options. We explain what each option means for each part of the debt, prepare defence submissions and negotiate with the ATO.
• Work with your accountant. Your accountant often holds the records that decide lockdown, so we work alongside them (see for accountants).

Next step

Send us the DPN (every page), the company's ATO lodgment history for the periods it lists, any Single Touch Payroll reports for those periods, and the date you became a director. In a first call we'll tell you which amounts look locked down, how long you have and what to do first.