Do you earn Personal Service Income (PSI)?
6 June, 2022 BY Bibek Nepal, CPA

Do you earn Personal Service Income (PSI)?

PSI is income that is mainly a reward for the personal efforts and skills of individuals like finance professionals, medical practitioners, IT consultants, etc.

If you receive PSI, PSI rules may apply to your business structure i.e. Company, trust, partnership, etc. This means you effectively ignore the structure that is in place and so, you will be taxed as if you were an employee.

Several types of deductions that may be available to you as a business will be disallowed if PSI rules apply to you. However, if you pass the four tests, you may be classified as a Personal Service Business (PSB) and so, PSI rules will not apply to your income. It is important that you get it right.

๐๐ž๐ž๐ ๐‚๐จ๐ง๐ฌ๐ฎ๐ฅ๐ญ๐š๐ญ๐ข๐จ๐ง?
If youโ€™re a professional, contractor, or a small business owner receiving personal service income, you can contact us to check whether PSI rules apply to your income and your eligible deductions.

Disclaimer:ย This article is provided as general information only and does not consider your specific situation, objectives, or needs. It does not represent accounting or tax advice upon which any person may act. Implementation and suitability require a detailed analysis of your specific circumstances. Before taking any action, consider your own circumstances and seek professional advice.


Related Blogs

May 8, 2023
BY Bibek Nepal, CPA
Tax planning refers to the process of arranging your finances in a way that minimizes your tax li...
February 27, 2023
BY Bibek Nepal, CPA
What is Fringe Benefits Tax? Fringe Benefit Tax (FBT) is a tax levied on non-salary benefits o...
January 15, 2023
BY Bibek Nepal, CPA
ย  Happy New Year! Itโ€™s that time of the year to muse on what you hope to accomplish over the...
December 4, 2022
BY Bibek Nepal, CPA
Companies are subject to a tax rate of 30% on their taxable income, except for certain companies ...
November 22, 2022
BY Bibek Nepal, CPA
Businesses are continuously evolving over time because the industry is constantly evolving as wel...
November 8, 2022
BY Bibek Nepal, CPA
If you are Australian resident for tax purposes, , you will need to declare and pay tax on your w...
October 24, 2022
BY Bibek Nepal, CPA
You may be considered to have taken Div 7A loan from your company if you (or your related party)...