Have you received Personal Services Income?

The ATO has updated their website on explaining Personal Services Income (PSI). Here is a brief snippet:

When working out if your income is PSI, you need to look at the income received from each separate contract. The terms and conditions of the contract, as well as invoices and written agreements (which show the arrangement for the work), are important in working out if the income is PSI.

Calculate what percentage of income from each job was for:

• your labour, skills, knowledge, expertise or efforts for the services you provided
• anything else, such as the materials supplied and/or tools and equipment used to complete the project.

If more than 50% of the income received for a contract was for your labour, skills or expertise, then all income for that contract is PSI.

If 50% or less of the income received for a contract was for your labour, skills or expertise, then none of the income for that contract is PSI.


For further details please click here.

PSI can apply limitations on what deductions you can claim and can also prevent you from paying wages to related people. If you think you may be affected by this we recommend that you call us today so we can discuss this further with you.