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All you need to do is provide the director with information, which it sounds like you have already done. If he doesn’t want to pay it, there is nothing you can do, nor do you need to report him in any way to the ATO or any other entity. Make a note in your workpapers that you have informed the client of his obligations then move on. However, you may like to advise him that the same laws apply to him as to any other employee, and that he is taking a risk in not paying his own super.
If the ATO does catch up with him down the track, he will need to pay the super guarantee charge and penalties the same as he would for any other employee. Super is a legal obligation of an employer to all eligible employees—he does not have any exemption to this rule.
From the Super Guarantee Ruling:
Directors’ fees
40. All fees paid to a company director are earnings in respect of the director’s ordinary hours of work.
From TAPS: “There are no circumstances when a director getting a cash amount as an employee could not get super, just like no other employee can decide not to have super paid for them. If the director was paid only fringe benefits then super would not apply, but then maybe the organisation would have to pay FBT”. (If this was the case, then you would be guided by The tax Agent as FBT is not a bookkeeper or BAS Agent area).
Director’s fees paid to a company director are considered to be ordinary time earnings and therefore super would apply.
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