Hi
Our client is doing consulting/bookkeeping service through her trust,she has engaged with oversea workers to help her with the business tasks. In this situation, if the outsourced payments she paid oversea is more than 20% of business income, could we say that PSI rule doesn't apply to the trust per below ATO PSI -employment test?
Thank you.
Hi @tulip222,
No, payments to overseas workers do not automatically allow the trust to pass the employment test.
The employment test looks at whether at least 20% of the principal work (the main consulting or bookkeeping work clients pay for) is done by employees or contractors engaged by the trust. Support, admin, or back‑office tasks don’t count as principal work.
Overseas workers can only be counted if:
You can’t count work done by associated companies, trusts, or partnerships when applying the test.
The trust must also pass the 80% rule to self‑assess the employment test. If 80% or more of the PSI comes from one client (including that client’s associates), the trust cannot rely on this test unless it has a personal services business determination.
Hi @tulip222,
No, payments to overseas workers do not automatically allow the trust to pass the employment test.
The employment test looks at whether at least 20% of the principal work (the main consulting or bookkeeping work clients pay for) is done by employees or contractors engaged by the trust. Support, admin, or back‑office tasks don’t count as principal work.
Overseas workers can only be counted if:
You can’t count work done by associated companies, trusts, or partnerships when applying the test.
The trust must also pass the 80% rule to self‑assess the employment test. If 80% or more of the PSI comes from one client (including that client’s associates), the trust cannot rely on this test unless it has a personal services business determination.
22 Apr 2024 · 3 min read time
15 Apr 2026 · 4 min read time
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