Personal services income
If most of your income is for your own effort, the PSI rules may treat it as yours personally, whatever entity it’s paid to. Passing the results test changes that.
Accountant for IT contractors and AI consultants
You write the code.We’ll handle the tax code.
Plain-English tax and structure advice for developers, IT contractors and AI consultants, including the personal services income rules that catch out so many contractors.
We know your work
Contractors, consultants and small tech businesses.
The Northern Rivers is full of people doing serious technical work from a home office: software developers contracting to Sydney and overseas companies, data and AI consultants, and small teams building products of their own.
The tax questions are similar whatever the job title. Do the personal services income rules apply? Is a company worth it? Do I charge GST to an overseas client? What can I claim? We answer them clearly, on your actual contracts and figures.
The questions that cost money
Four things every tech contractor should check.
Company, trust or sole trader
A company or trust only helps if you’re running a personal services business. We check that first, then model the options.
GST and overseas clients
Registration is required once turnover reaches $75,000. Services to overseas clients can be GST-free, but the rules need checking contract by contract.
Deductions and equipment
Home office, computers, software, subscriptions and training, claimed correctly and with the records to back them up.
How we help
From your first contract to a growing business.
Getting set up
ABN, GST registration, the right structure and a simple bookkeeping set-up in Xero.
For people leaving employment to contract.PSI review
We review your contracts and income against the PSI tests and explain what it means for your tax.
For contractors unsure where they stand.Ongoing tax and BAS
Quarterly BAS, tax planning before June and your returns, done on time.
For established contractors and consultancies.Growing beyond yourself
Hiring staff or subcontractors, super obligations, and structures for a product business.
For consultants building a team or a product.
Your accountant
Brad Tom, Partner
Brad has been a partner at TNR since 2000. He works with companies, trusts, partnerships, sole traders and self-managed super funds, and is a Chartered Accountant and registered tax agent with a Bachelor of Business from the University of New England.
Brad works with contractors and small businesses on structure, personal services income and the tax that comes with growth.
Book a call with BradBecause he knows our businesses so well, we are comfortable following his advice.Dennise Simmons, Simmos Automotive Group. A TNR client for more than twenty years.
Questions people ask
What is personal services income?
Income earned mainly from your personal skills or effort, such as a contractor paid for their own hours. If the PSI rules apply, the income is taxed as yours personally, even if it’s paid to your company or trust, and many deductions are limited.
How do I know if the PSI rules apply to me?
They don’t apply if you’re running a personal services business. The main test is the results test: you’re paid to produce a result, you supply your own tools and you’re liable to fix your own mistakes. If you don’t pass that, other tests look at how many unrelated clients you have and how much of your income comes from one client.
Should an IT contractor use a company?
A company can make sense once you’re running a genuine business, but if the PSI rules apply, it won’t reduce tax on your personal services income. We check the PSI position first, then look at whether a company or trust is worth the extra cost.
When do I need to register for GST?
Once your GST turnover reaches $75,000 a year, or is likely to. Below that you can choose to register. If you work for overseas clients, some of your services may be GST-free.
Can I claim my home office and equipment?
Usually, if you work from home and buy equipment for your work. Keep a record of your hours working from home and receipts for equipment and software. Larger items are depreciated over time unless an instant write-off applies.
Free 20-minute call
Talk to us about where you’re up to.
A complimentary, confidential 20-minute call, by phone or Zoom. No forms and no obligation.
Book a 20-minute call
Or call the office on (02) 6685 6529