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  • Step 3: The 80% rule

    If you've worked through the results test but did not pass, your next step is to apply the 80% rule. This step is about your PSI client base and how much of your PSI comes from one client.

    The 80% rule will let you know whether an individual or entity can self-assess that it is conducting a PSB against the unrelated clients test, the employment test or the business premises test.

    For this step, you need to work out the amount of PSI that comes from each client (including their associates) in an income year. If you're a commission agent, the clients of a principal can be treated as your own clients in certain circumstances. If you're paid by a labour hire firm, the labour hire firm is the source of the income.

    If you're a company, partnership or trust and you have more than one individual generating PSI, the 80% rule applies to each individual. You need to look at the amount of PSI that you receive for each individual and how much of that amount comes from one source.

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    • The draft ruling has more information on the 80% rule and whether an individual or entity can self-assess.
    Last modified: 16 Aug 2021QC 46014