Director liability risk score

Answer nine questions to see where a director or senior manager is most exposed to personal liability: underpayment, sham contracting, adverse action, unpaid tax and super, and WHS due diligence.

Figures checked 5 November 2026. Free to use, no sign-in.

Answer for the business you’re a director or senior manager of

Unsure answers are left out of the score.

Has the business knowingly paid anyone less than their award, agreement or contract requires?
Do you know of an underpayment, or an unpaid entitlement, that hasn’t been fixed yet?
Is any PAYG withholding, GST or super guarantee charge overdue or unreported?
In the last 3 years, has the Fair Work Ombudsman investigated the business, issued a compliance notice, or taken an enforceable undertaking?
Do any ‘contractors’ work like employees: regular hours you set, your tools, only for you?
In the last 12 months, has anyone’s hours, duties or job changed soon after they made a complaint or inquiry about their employment?
Is payroll checked against the award or agreement at least once a year, and after each annual wage increase?
Do you keep time and wage records and give payslips within one working day of each pay?
Do directors get regular safety reports and check that safety controls are actually used?

Your personal exposure

Director liability risk

Answer at least 3 questions

Unsure answers don’t count either way.

Why directors are personally exposed

Anyone “involved in” a Fair Work Act contravention, including by being knowingly concerned in it, is treated as having contravened it (s 550). Since 1 January 2025 intentional underpayment is also a crime: up to 10 years’ imprisonment for an individual, and fines of the greater of 3 times the underpayment or $1,820,000 for an individual and $9,100,000 for a company (5,000 and 25,000 penalty units at $364).

Related checks: contractor or employee, officer due diligence audit, SGC penalty calculator.

  • The score is an indicative scale built for this check, not a legal test. It shows where personal liability is most likely to arise.
  • Unsure answers are left out of both your score and the maximum, so they never raise the result. List them and find out.

General information, not legal advice.

How this works

Each risky answer adds points, weighted by how directly it leads to personal liability (from 2 for payslip and record keeping to 6 for knowingly underpaying). The score is the share of the points available on the questions you answered: under 20% Low, 20% to under 40% Moderate, 40% to under 65% High, 65% or more Critical.

Three answers set a minimum result on their own: knowingly underpaying (Critical), knowing about an unfixed underpayment (High) and overdue PAYG, GST or super guarantee charge (High). Unsure answers are left out of the score and the maximum, and a band needs at least three Yes or No answers.

Legal basis

Checked against these sources on 5 November 2026. Spotted a figure that looks wrong? Tell us.

Questions

Can a director be personally liable for underpaying staff?

Yes. Under s 550 of the Fair Work Act a person who is involved in a contravention, for example by being knowingly concerned in it, is treated as having contravened it and can be ordered to pay penalties personally. Intentional underpayment is also a criminal offence under s 327A.

What is the wage theft offence?

From 1 January 2025 it is a crime for an employer to intentionally underpay required amounts. The maximum is 10 years’ imprisonment for an individual, and a fine of the greater of 3 times the underpayment or 5,000 penalty units for an individual and 25,000 penalty units for a company. The Fair Work Ombudsman must not refer a small business for prosecution if it complied with the Voluntary Small Business Wage Compliance Code.

Are directors liable for unpaid super and tax?

Under the ATO’s director penalty regime, directors can become personally liable for the company’s unpaid PAYG withholding, GST and super guarantee charge, recoverable 21 days after a director penalty notice.

Do directors have WHS duties?

Yes. Directors are officers who must exercise due diligence to make sure the business meets its WHS duties (s 27 of the WHS Act). In Victoria an officer can be liable under s 144 of the OHS Act if the company’s breach is attributable to their failure to take reasonable care.

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Questions the calculator can’t answer?

Workfloor answers pay, award, leave and termination questions for your team, with the Fair Work Act section or award clause behind each answer.

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