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P16 Payments to associated persons

Last updated 25 May 2022

Instructions to complete P16 payments to associated persons.

Did you make any payments to associated persons as a business expense?


Go to P17 Intangible depreciating assets first deducted.


Read on.

You need to know

These are amounts, including salary, wages, commissions or allowances, paid to your relatives. These also include superannuation contributions paid for the benefit of your relatives.

You must also include amounts of salary or wages paid to your relatives and a partnership in which your relatives are partners at G item P15 on your schedule.

You need to keep the following records:

  • full name of relatives or related partnerships
  • age, if under 18 years old
  • relationship
  • nature of duties performed
  • hours worked
  • total remuneration
  • salary or wages claimed as deductions
  • other amounts paid, for example, retiring gratuities, bonuses and commissions.

Excessive or unreasonable payments to your relatives, or a partnership in which your relatives are partners, may not be deductible. The PSI rules (see P1 Personal services income (PSI)) also limit deductions for payments to associates.

Completing this item

Step 1 Add up payments made to relatives and related partnerships from each business.

Step 2 Enter the total at H item P16 on page 5 of your schedule. Do not show cents.

Continue to: P17, P18, P19 and P20 – depreciating assets