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  • Step 2: Results test

    If you've worked out that your income includes PSI, your next step is to work through the results test. This test is about the nature of your agreement to perform the work, including the basis on which you are paid.

    To pass the results test in an income year, you need to meet the following three conditions:

    If you pass the test, your business is a personal services business (PSB) for that income year and the PSI rules don't apply.

    You may find that some of your business contracts meet the three conditions of the test and some don't. To pass the results test, you need to meet all three conditions for at least 75% of the PSI for the income year.

    When working out whether you meet each of the conditions of the results test, you must consider what is the custom or practice in the industry for the work you're performing.

    If more than 25% of your PSI came from an agency (such as a labour hire firm), you are not likely to pass the results test as you generally contract with an agency to provide services at the direction of the end client.

    If you're a company, partnership or trust and you have more than one individual generating PSI, you will need to work out whether you pass the results test for each individual. It is possible to be a PSB for one individual but not another.

    Next steps:

    See also:

    Last modified: 30 Mar 2017QC 46006