PSI Tests
PSI Rules Apply
Your deductions are limited to those available to employees.
Gross Income
$180,000.00
Total Tax
$44,518.00
Net Income
$117,482.00
Effective Rate
24.7%
| If PSI | If Not PSI | Difference | |
|---|---|---|---|
| Gross Income | $180,000.00 | $180,000.00 | - |
| Deductible Expenses | $18,000.00 | $35,000.00 | $17,000.00 |
| Taxable Income | $162,000.00 | $145,000.00 | $17,000.00 |
| Total Tax | $44,518.00 | $37,888.00 | $6,630.00 |
| Net Income | $117,482.00 | $107,112.00 | $10,370.00 |
What is PSI?
Personal Services Income is income mainly generated from your personal skills or efforts. If more than 50% of the income received is for your labour, skills, or expertise (rather than from tools, equipment, or assets), it is likely PSI.
PSI Rules
When PSI rules apply, deductions are limited to those available to employees. You cannot split income with associates, and the PSI is attributed to you personally regardless of entity structure. However, you can still claim deductions for gaining or producing PSI.
PSI Tests
To avoid PSI rules, you can pass one of four tests: the Results Test (most common), the Unrelated Clients Test, the Employment Test, or the Business Premises Test. If you pass the Results Test, PSI rules do not apply regardless of other factors.
Impact on Your Tax
If PSI rules apply, you cannot claim many common business deductions such as home office expenses, travel between home and work, or expenses for providing services to an entity you control. The income must be reported in your individual tax return, even if earned through a company or trust.
ATO-Aligned: Uses 2025-26 PSI rules. PSI determinations can be complex. Consider getting a PSI determination from the ATO or consulting a tax professional.
Disclaimer: This calculator provides estimates based on current ATO rates and thresholds for the 2024–25 financial year. It does not constitute professional tax, financial, or legal advice. Your actual liability may differ depending on your individual circumstances. Always consult a qualified tax agent before making financial decisions. Read our terms
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