Claiming deductions when receiving PSI

If you receive personal services income (PSI) and the PSI rules apply, the rules limit the deductions you can individually claim against this income.

The way the PSI rules apply is different for:

You must keep records of your business transactions, including expense claims, for five years after they are prepared, obtained or the transactions completed, whichever occurs later. You will need to show whether the expense relates to PSI or other income.


If your business received PSI but found that the rules do not apply, there are no changes to the deductions you can claim against the income. Although, you will still need to declare PSI amounts at the relevant labels on your business tax return.

When we say 'you' or 'your business', we mean the entity you operate through, whether that is as a sole trader, or through a company, partnership or trust.

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Personal services income

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    Last modified: 14 Sep 2016QC 46085