Personal Services Income

The ATO has been concerned about arrangements involving individual professional practitioners who redirect their income from an activity or business that includes their professional services to an associated entity where it has the effect of significantly reducing your tax liability.

Personal Services Income, or PSI, is the income derived by an individual mainly as a result of their personal work or exertion, rather than the sale of goods or use of assets. The individual may operate as a sole trader, or through a trust, partnership, or company structure. You can receive PSI in almost any industry or profession, but it is commonly seen within the Professional Services sector (namely among accountants, lawyers, consultants and engineers, etc) and medical practitioners.