Personal services income (PSI)

Personal service income is income which taxpayer got by their individual’s personal efforts and skills. Persona service income such as:

  • income of a professional practitioner in a sole practice
  • income payable under a contract for the labour or services of a person
  • Income derived by a professional sportsperson or entertainer by professional skills
  • Income derived by consultants from the exercise of personal expertise.

PSI does not include income that is mainly:

  • for supplying or selling goods (for example, from retailing, wholesaling or manufacturing)
  • generated by a significant income-producing asset (such as a bulldozer) for granting a right to use property (for example, the copyright to a computer program)
  • generated by a business structure (for example, a large accounting firm).

PSI earned by sole trade only. If you gain personal service income as an employee from company, partnership or trust.

If you earned PSI but you are not work as employees of company, you may not eligible to claim deductions in relation to earning that income such as rent, mortgage interest, rates or land tax for your home, or payments to your spouse or other associate.

This depends on whether:

  • you have a personal services business determination from the Commissioner of Taxation stating that your PSI was from conducting a personal services business for the whole of the period you earned PSI, or
  • you satisfied one of the four tests in Personal services income conditions.

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