Topics on Personal Service Income (3) – Overview of the PSI Rules (3)

Passing the other personal service business tests

To pass the other personal service business (PSB) tests, you need to consider the following:

1. The 80/20 Test: Less than 80% of your Personal Services Income (PSI) should come from one source (client or their associates) during the income year (S.84-15(3)).

2. Other PSB Tests: a) Unrelated Clients Test: You must earn income from providing services to at least two entities not associated with each other or with you. These services should result from public offers or invitations, such as advertising or word of mouth referrals (S.87-20(2)).

   b) Employment Test: If entities other than you perform at least 20% of your principal work or you have apprentices for at least half of the income year, you satisfy this test (S.87-25).

   c) Business Premises Test: You must meet several conditions regarding the business premises, including conducting most activities related to PSI from those premises, having exclusive use of them, and ensuring they're physically separate from private premises and client premises (S.87-30).

If you fail both the results test and the 80/20 test, you can seek the Commissioner's determination regarding conducting a PSB (S.87-15(1)(a)).

For further assistance, you can reach out to Tax Ideas Accountants & Advisers at

+61 2 83181545 or book an appointment via their live calendar.

• Topics on Personal Service Income (1) – Overview of the PSI Rules (1)
• Topics on Personal Service Income (2) – Overview of the PSI Rules (2)
• Topics on Personal Service Income (4) – Fortunatow’s Case (1)
• Topics on Personal Service Income (5) – Fortunatow’s Case (2)
• Topics on Personal Service Income (6) – Fortunatow’s Case (3)
• Topics on Personal Service Income (7) – Ariss’s Case (1)
• Topics on Personal Service Income (8) – Ariss’s Case (2)
• Topics on Personal Service Income (9) – Douglas’s Case