Personal services income (PSI)

If you’re paid mostly for your personal efforts, skills or expertise, you might be receiving personal services income (PSI). 

Income is classified as PSI when more than 50% of the income you've received is a reward for your personal efforts and skills, rather than being generated by using assets or selling goods. 

If you earn PSI you need to apply certain tests to it, called the ‘personal services business’ tests. The tests will help you understand if personal services income rules apply to your PSI. If they do apply, it will affect how you report your PSI to the ATO and the deductions you can claim. 

A sole trader business structure is far less affected by PSI rules than other business structures.

Starting a small business

Steps Progress

Is my hobby a business?

9 mins

Business structures overview

5 mins

Business registrations

5 mins

Sole trader structure

7 mins

Partnership structure

10 mins

Company structure

13 mins

Trust structure

7 mins

Small business support

10 mins

Related courses

1 mins

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