Super contributions for an associate (for example, spouse, child or other relative) cannot be deducted if the associate does non-principal work such as bookkeeping, issuing invoices, administrative duties and running the home office.
However, super contributions for an associate can be deducted if the associate does principal work which contributes to the PSI. Deductions are allowed up to the minimum percentage that you would have to contribute to meet superannuation guarantee (SG) requirements for that associate.
You can contribute more than the SG minimum percentage if, in engaging an associate, you pass the employment test, as you will be a personal services business (PSB) and the PSI rules won't apply to that income.
If an associate completes work that generates income that is not PSI, deductions for super contributions for that work are not affected by the PSI rules. The PSI rules also don't affect deductions for super contributions that are made for yourself.
The term 'super contributions' refers to contributions you make to a super fund or retirement savings account. Deductions for super contributions are subject to other tax rules.
Personal services income
Steps | Progress | |||||||||||||||||||
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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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