Personal Services Income: What is it and who does it affect?

Sept 2022

Personal Services Income (PSI) is income that is predominantly earned for an individual’s personal effort or skill. You can receive PSI in almost any industry, trade or profession. However, some common examples include financial professionals, information technology consultants, engineers, construction workers or medical practitioners.

Income is classified as Personal Services Income when more than 50% of the income you’ve received is a reward for your personal efforts and skills, rather than being generated by the use of assets, the sale of goods or by a business structure.

PSI does not affect you if you’re an employee receiving only salaries and wages. But, if you are operating through an entity, such as a company, partnership or trust, and are an employee of that entity then the PSI rules may still apply.

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