Company, partnership or trust
You'll need to be aware of the following if you operate through a company, partnership or trust and the PSI rules apply:
The PSI rules only apply to income that is PSI. You can still claim expenses against other income and normal tax rules apply.
If you received both PSI and other income, you need to allocate your expenses between each category of income.
Where the PSI has been generated by more than one individual, the deductions relating to that PSI need to be apportioned between the individuals who earned it.
How you attribute PSI
The PSI your business received needs to be allocated (or 'attributed') to each individual who performed the services, and the individual will need to declare the income in their individual tax return.
Additional PAYG withholding obligations
Your business will have additional PAYG obligations for the amount attributed (treated as belonging) to each individual who performed the services.
Tax return obligations
Your business, as well as each individual who performed the services, has tax return obligations for the PSI received.
When the PSI rules apply, you will need to complete the following questions on your business tax return:
- Business income
- Personal services income.
Find out about deductions and tax obligations as a company, partnership or trust when the PSI rules apply.