PSI - Personal Services Income EXPLAINED

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If you’re a contractor, consultant, or small business owner in Australia, then you would have heard of Personal Services Income, also known as PSI. But what is it?

This is an incredibly complex thing to understand, and determining whether PSI rules apply to your business or not will greatly affect how much you can save on tax. I’ve explained Personal Service Income to a lot of my clients many times in a simple and easy-to-understand way.

So in this video, I’ll explain everything you need to know about Personal Services Income.

CHAPTERS:
00:00 - Intro
00:24 - What is Personal Services Income?
01:00 - The PSI Rule Explained
02:38 - How to Apply the Personal Services Business Test
03:56 - Step 1: Have You Received PSI?
04:30 - Step 2: The Results Test
05:21 - Step 3: 80/20 Rule
05:55 - Step 4: The Remaining Test
06:56 - Case Study: Applying PSI Rules to a Trades Business
07:49 - Case Study: Applying PSI Rules to a Consulting Business
10:16 - What to do if you’re not sure about PSI

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Davie has over 14 years of experience in advising businesses in management accounting and taxation issues. He heads up a passionate team at Box Advisory Group who are dedicated to offering proactive and outstanding service to our clients.

Davie’s extensive experience in providing tax and consulting advice and astute business knowledge has paved the way for success for many businesses.

He is a member of the Chartered Accountants Australian and New Zealand, a member of the Australian Tax Practitioners Board and holds a Bachelor of Commerce degree from the University of New South Wales.

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DISCLAIMER: Please note that every effort has been made to ensure that the information provided in this video is accurate. You should note, however, that the information is intended as a guide only, providing an overview of general information available to contractors and small businesses. This guide is not intended to be an exhaustive source of information and should not be seen to constitute legal or tax advice. You should, where necessary, seek your own advice for any legal or tax issues raised in your business affairs.