If your company mainly earns income from providing services to your clients, it may be a personal services entity (PSE). 

Your company will not be a PSE if it primarily earns income from the use of assets, sale of goods, or from a business structure.

If your company is a PSE, you need to apply certain tests to check whether the PSI rules apply to your company. The rules will not apply if your company meets one or more of the tests. 

If the rules do apply, it’s critical you understand how the PSI is going to be treated for tax purposes. It will affect how you report your PSI to the ATO and the deductions you can claim. The net PSI will be treated as your individual income for tax purposes. It will be taxed at individual rates, not company rates. That will have a large impact on your company’s financial planning.