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  • Unrelated clients test for PSI

    To pass the unrelated clients test your PSI must be produced from two or more clients who are not related or connected, and the work must be obtained by making offers to the public or sections of the public.

    You pass the test in an income year if you meet both of the following conditions:

    You do not pass the unrelated clients test if you source all your work through arrangements such as a labour hire firm.

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

    Two or more unrelated clients

    To satisfy this condition, you must have received the PSI from two or more unrelated clients.

    Unrelated clients are clients who aren't associated with each other and aren't associated with you. Companies in the same group are related as they are controlled by the same entity.

    If you are a commission agent you may be able to treat the clients of a principal as your own clients.

    Making offers to the public

    To satisfy this condition, there must be a definite connection between the offer to the public at large and the engagement for the work.

    Making offers to the public (or a section of the public) includes: maintaining a website, applying for competitive public tenders, or advertising in a newspaper, industry journal or business directory.

    Registering with labour hire firms or similar will not meet this condition.

    Remember, you only need to pass one of the tests in Step 4.

    Next steps:

    Last modified: 07 Aug 2019QC 46019