• 14 - Personal services income (PSI) 2012

    Question 14 image from the Tax return for individuals (supplementary section) form.

    Did you receive income from personal services you provided?

    Attention

    Warning:

    This information may not apply to the current year. Check the content carefully to ensure it is applicable to your circumstances.

    End of attention

    NO

     

    YES

    Read below.

    Are you a sole trader?

    NO

     

    YES

    Read below.

    Your personal services income can include:

    • personal services income under a pay as you go (PAYG) voluntary agreement
    • personal services income from which an amount was withheld because you did not quote your Australian business number (ABN)
    • personal services income from
      • working under a labour hire arrangement as an independent contractor
      • payments (called specified payments) for
        • tutorial services you provided for the Indigenous Tutorial Assistance Scheme of the Department of Education, Employment and Workplace Relations
        • translation and interpretation services you provided for the Translating and Interpreting Service National of the Department of Immigration and Citizenship
        • performing as a performing artist in a promotional activity.
         
       
    Danger

    Do not show at this item income you received as an employee. This is shown elsewhere on your tax return.

    Also do not show at this item personal services income that was subject to foreign resident withholding. Include this income at item 15 - Net income or loss from business. The rules for the tax treatment of personal services income will apply to the personal services income included at item 15 - Net income or loss from business.

    End of danger

    You need to know

    Personal services income is income that is mainly a reward for an individual's personal efforts or skills.

    Examples of personal services income are:

    • income of a professional practitioner in a sole practice
    • income payable under a contract which is wholly or principally for the labour or services of a person
    • income derived by a professional sportsperson or entertainer from the exercise of professional skills
    • income derived by consultants from the exercise of personal expertise.

    Personal services income does not include income that is mainly:

    • for supplying or selling goods, for example, from retailing, wholesaling or manufacturing
    • generated by an income-producing asset, for example, from operating a bulldozer
    • for granting a right to use property, for example, the copyright to a computer program
    • generated by a business structure, for example, a large accounting firm.

    There are special rules for the tax treatment of personal services income earned by sole traders including contractors and consultants. If you had personal services income as a sole trader and you were subject to the special rules, you will not be able to claim certain deductions, for example, rent, mortgage interest, rates or land tax for your home, or payments to your spouse (or other associate) for support work such as secretarial duties.

    You will be subject to the special rules if you were not conducting a personal services business.

    Further Information

    You need to read the publication Business and professional items 2012 (NAT 2543) before you can complete this item.

    End of further information

    Business and professional items 2012 contains the Business and professional items schedule for individuals 2012 (NAT 2816) and the Individual PAYG payment summary schedule 2012 (NAT 3647).

    What you may need

    Completing this item

    Part A

    Business and professional items schedule for individuals 2012 and Individual PAYG payment summary schedule 2012

    Step 1

    Complete the Business and professional items schedule for individuals 2012 and attach it to page 3 of your tax return. If you do not attach your schedule, we will send your tax return back to you and will not consider that you have lodged it until it is returned with all schedules attached. We may apply the failure to lodge on time penalties if this results in your tax return being lodged after the due date. Do not include any of your calculations on your tax return. When you attach your schedule to page 3 of your tax return, print X in the YES box at Taxpayer's declaration question 2b on page 12 of your tax return.

    Step 2

    If you received personal services income from which tax was withheld, complete the Individual PAYG payment summary schedule 2012 and attach it to page 3 of your tax return. Print X in the YES box at Taxpayer's declaration question 2a on page 12 of your tax return.

    Did you write an amount at A item P1 on your Business and professional items schedule for individuals 2012?

    NO

     

    YES

    Read below.

    Part B

    Net personal services income

    Step 1

    Transfer your net personal services income or loss shown at A item P1 on your Business and professional items schedule for individuals 2012 to A item 14 on page 13 of your tax return. Do not show cents.

    Step 2

    If you made a loss, print L in the LOSS box at the right of A.

    Step 3

    If you made a loss from one or more business activities, check that you have completed items P3 and P9 on the Business and professional items schedule for individuals 2012.

    Attention

    If you carried on a business as an author, dramatic artist, musician, artist, inventor, performing artist, production associate or active sportsperson, you must also write the amount of income you received from these business activities at Z item 24 - Other income. You will not be taxed twice on this income.

    End of attention

    Part C

    Tax withheld from personal services income

    Did you include an amount at M, N or O item P1 on your Business and professional items schedule for individuals 2012?

    NO

    Go to Check that you have...

    YES

    Read on.

    1  Did you have amounts of tax withheld under a pay as you go (PAYG) voluntary agreement?

    NO

    Go to 2 below.

    YES

    Read below.

    Add up all the amounts on your Individual PAYG payment summary schedule 2012 at the Tax withheld boxes with a V in the TYPE box. These amounts must relate to the payments shown at M item P1 on your Business and professional items schedule for individuals 2012. Write this amount at G item 14 on page 13 of your tax return. Do not show cents.

    2  Did you have amounts of tax withheld because you did not quote your Australian business number?

    NO

    Go to 3 below.

    YES

    Read below.

    Add up all the amounts on your Individual PAYG payment summary schedule 2012 at the Tax withheld boxes with an N in the TYPE box. These amounts must relate to the payments shown at N item P1 on your Business and professional items schedule for individuals 2012. Write this amount at H item 4 on page 13 of your tax return. Show cents.

    3  Did you have amounts of tax withheld because you received personal services income from:

    • working under a labour hire arrangement, or
    • a specified payment?

    NO

    Go to Check that you have...

    YES

    Read below.

    Add up all the amounts on your Individual PAYG payment summary schedule 2012 at the Tax withheld boxes with an S in the TYPE box. These amounts must relate to the payments shown at O item P1 on your Business and professional items schedule for individuals 2012. Write this amount at J item 14 on page 13 of your tax return. Do not show cents.

    Check that you have...

    • read the publication Business and professional items 2012, completed your Business and professional items schedule for individuals 2012 and attached it to page 3 of your tax return
    • transferred the amount from A item P1 on your Business and professional items schedule for individuals 2012 to A item 14 on your tax return. If this amount is a loss, print L in the LOSS box at the right of A
    • printed X in the YES box at Taxpayer's declaration question 2b on page 12 of your tax return.

    If you received personal services income from which tax was withheld, also check that you have:

    • completed your Individual PAYG payment summary schedule 2012 and attached it to page 3 of your tax return
    • written amounts at G, H and J item 14, if required
    • printed X in the YES box at Taxpayer's declaration question 2a on page 12 of your tax return.

    Where to go next

     
      Last modified: 01 Jun 2012QC 25728