What are the PSI 80% rule tests?

The ATO first applies the results test. If that isn't met, the 80% rule applies: no more than 80% of your personal services income for the year can come from one client. If you clear the 80% rule, you also need at least one of the unrelated clients test, the employment test, or the business premises test to be treated as a Personal Services Business.

How much tax do I pay if the PSI rules apply to me?

If none of the tests are satisfied, your PSI is attributed to you personally and taxed at ordinary individual marginal rates for FY2026-27 — 0% up to $18,200, 15% from $18,200 to $45,000, 30% from $45,000 to $135,000, 37% from $135,000 to $190,000 and 45% above that — plus the Medicare Levy, on top of only the deductions an employee doing the same work could have claimed.

Does having an ABN protect me from the PSI rules?

No. Registering for an ABN is unrelated to whether the PSI rules apply. What matters is whether your income is a reward mainly for your personal effort or skill and whether you pass the self-assessment tests — an ABN holder can still be treated as PSI-attributed.

What happens to my company tax rate if PSI is attributed to me?

The 25% base rate entity (or 30% standard) company tax rate becomes largely academic, because attributed PSI income bypasses the company and is taxed in your hands at your individual marginal rates instead of being retained and taxed at the company rate.

PSI Tax Calculator — Personal Services Income Cost (Australia)

What the PSI rules actually cost you

The Personal Services Income (PSI) rules don't ask whether you have an ABN — they ask whether the income you earn is mainly a reward for your own personal skill, knowledge or effort rather than the output of a genuine business. If it is, and you can't satisfy one of the ATO's self-assessment tests, the tax treatment changes significantly for the 2026-27 financial year, no matter how your invoicing is structured.

Most one-person contracting businesses check the results test first: are you paid to produce a specific outcome, do you supply your own tools/equipment, and are you liable to fix defects at your own cost? If that fails, the fallback is the 80% rule — no more than 80% of your PSI can come from one client — combined with at least one of the unrelated clients test, the employment test, or the business premises test. This calculator lets you see the dollar difference between passing those tests (Personal Services Business status) and having the rules apply.

How to use this calculator

Enter your contract income for the year
Indicate whether you pass the results test, or the 80% rule plus a supporting test
Compare your tax as a Personal Services Business against the PSI-attributed outcome
Check the PCG 2021/4 profit-allocation flag if you're weighing keeping profit in a company

PSI Tax Calculator