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Pty company pays dividend to employee/director

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Old 21-02-11
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Default Pty company pays dividend to employee/director

A Pty Ltd company has made a dividend payment to a director who is also an employee. Should this be done as payroll payment and deduct PAYG or can the whole amount go to the director and he include it on his personal tax return? Can he claim franking credits on his personal tax return if company has paid company tax?

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Default Re: Pty company pays dividend to employee/director

If its a dividend payment it does not appear on PAYG statements and not included on payroll

and yes like any other shareholder receiving a dividend should be declared in his personal return and would be allowed a franking credit

Just need to be certain it is a dividend and not fees or salary

Note dividends can be assessable for workers comp if paid to working directors who are not paid a reasonable salary

If you need any clarification or act references please feel free to Pm me

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