PAYG withholding and labour-hire firms

How do personal services income rules affect labour-hire arrangements?

Personal services income (PSI) rules do not affect your obligation to withhold from payments to individual workers. However, they do affect how a worker reports their income in their own tax returns and the deductions they can claim.

Last Modified: Tuesday, 7 May 2013

Table of contents

What is a labour-hire or on-hire arrangement?

Do you have to withhold tax from payments to workers?

Do workers need to provide their TFN?

What if a worker provides an ABN?

Are you required to make super contributions on behalf of a worker?

How do you identify an employee or independent contractor?

How do you know which PAYG withholding provision to use?

How much do you withhold?

Can a worker ask to withhold tax using their instalment rate instead of tax tables?

Can a labour-hire worker enter into a voluntary agreement?

How do personal services income rules affect labour-hire arrangements?

Do you have to provide payment summaries and annual reports?

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