Personal services income… what is it?

PSI (personal services income) is income produced from your personal effort or skills as an individual. This is calculated for each contract/invoice separately. If more than 50% of the income is from personal skill or labour, then all of that income is PSI. If it is 50% or less, none of it is PSI.

“You don’t earn PSI if your income is:

•  from selling or supplying finished goods, even if you made them
•  from an income-producing asset, such as renting a vehicle or machinery
•  from licencing your intellectual property, such as a patent”

Found out you have earned PSI?

If you earn PSI, you will need to figure out if PSI rules apply to it, depending on which you may be able to claim deductions.

For further information, check out business.gov.au, the source of our post.