If you earn PSI, and the PSI rules apply to that income, the types of deductions you can claim may be affected.
In general, when you earn PSI, you’re treated as though you’re in the same position as an employee.
This means your business may claim deductions against PSI received if:
- the expenses are incurred in producing the income, and
- you (as an individual who earns the income) would be entitled to the deduction.
This applies to all PSI, whether it is earned as a sole trader or through a company, partnership or trust.
You must keep records of your transactions, including expense claims, for 5 years after they are prepared, obtained or the transactions completed, whichever occurs later. You will also need to show whether the expenses relate to PSI or other income.
Where PSI is generated by more than one individual in a business, you need to allocate the deductions which relate to the income received by each individual.
Personal services income
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What is PSI? |
4 mins | |||||||||||||||||||
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Is the income PSI? |
5 mins | |||||||||||||||||||
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Income that is not PSI |
9 mins | |||||||||||||||||||
Whose PSI is it? |
7 mins | |||||||||||||||||||
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Working out if the PSI rules apply: self-assess as a personal service business (PSB) |
2 mins | |||||||||||||||||||
The 80% rule |
5 mins | |||||||||||||||||||
Results test |
8 mins | |||||||||||||||||||
Unrelated clients test |
5 mins | |||||||||||||||||||
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Employment test |
5 mins | |||||||||||||||||||
Business premises test |
7 mins | |||||||||||||||||||
Obtaining work through an agency |
5 mins | |||||||||||||||||||
Apply for a personal services business determination (PSBD) |
3 mins | |||||||||||||||||||
What to do when the PSI rules apply |
2 mins | |||||||||||||||||||
What to do when the PSI rules apply: claiming deductions |
11 mins | |||||||||||||||||||
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What to do when the PSI rules apply: how to attribute PSI |
8 mins | |||||||||||||||||||
What to do when the PSI rules apply: PAYG |
18 mins | |||||||||||||||||||
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What to do when the PSI rules apply: completing your tax return |
4 mins | |||||||||||||||||||
What to do if the PSI rules don’t apply |
3 mins | |||||||||||||||||||
Record keeping for PSI |
1 mins | |||||||||||||||||||
Help for PSI |
1 mins | |||||||||||||||||||
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Case study: instructions |
1 mins | |||||||||||||||||||
Case studies: sole trader |
11 mins | |||||||||||||||||||
Case studies: partnership |
12 mins | |||||||||||||||||||
Case studies: company |
12 mins | |||||||||||||||||||
Case studies: trust |
12 mins | |||||||||||||||||||
Related courses |
1 mins | |||||||||||||||||||
Course Feedback |
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