Personal Services Income
Last reviewed 13 June 2026 by Nick Lim, finance broker (FBAA).
Personal Services Income (PSI) is income earned mainly from an individual's personal skills or effort rather than from a business structure or assets. The ATO's PSI rules can attribute that income back to the individual, limiting deductions and affecting how income flows through a company or trust. This matters to lenders because it changes how income shown in a structure is read for serviceability.
Why Personal Services Income Matters
PSI rules decide whose income it really is, which changes both the tax and how a lender reads it.
- Income from personal skill, not assets or a business
- ATO rules can attribute it to the individual
- Limits some deductions
- Affects income flow through a company or trust
- Changes how income reads for serviceability
Common Features of Personal Services Income
- Earned chiefly from personal effort
- Tested against the PSI rules
- Can be attributed to the individual
- Limits structure-based deductions
- Relevant to contractors and sole clinicians
Official reference: ato.gov.au
What is personal services income?
Income earned mainly from an individual's personal skills or effort, rather than from assets or a business.
What do the PSI rules do?
They can attribute the income to the individual and limit deductions claimed through a structure.
Why does PSI matter for a loan?
Because it affects how income shown in a company or trust is read for serviceability.
Who is affected by PSI?
Often contractors and sole clinicians whose income comes mainly from their own effort.
Does PSI stop me using a company?
No, but it can limit the tax benefits, so structuring advice is important.