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Re: Deductions and attributed PSI

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Newbie

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In the 2018-19 Financial Year I worked as an IT contractor through Peoplebank and recieved regular monthly pay for hours worked (like salary/wages), on my payslip/pre-fill this is shown as 'Attributed PSI' as a result it looks like myTax won't let me lodge deductions.

 

I have a number of deductions for things like travelling between multiple worksites in a day, work related books, etc. These weren't expensed to Peoplebank or deducted by them. However in myTax I can't access the sections where these would normally be lodged:

  • Work-related car expenses
  • Work-related travel expenses
  • Work-related clothing, laundry and dry-cleaning expenses 
  • Work-related self-education expenses 
  • Other work-related expenses

All have a message that "To make a claim in this section, you must first show income from salary and wages or foreign employment income in the Income statements and payment summaries section."

 

All of the information I can find online describes the rules for determining whether something is PSI and explaining that as PSI it will be treated equivalent to salary/wages for tax purposes rather than being treated as business income.

I'm not trying to deduct anything the taxation rulings prohibit (salary, mortgages, etc) but mytax seems to lock me out of the normal deductions.

 

Hoping someone could point me in the right direction.

 

Thanks

 

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ATO Certified Response

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Replies 3

Hi @AUUK-taxq

 

Use the Personal services income (PSI) decision tool on our website to work out whether you earned PSI, and if the PSI rules apply to that income.

 

The is Special tax rules (PSI rules) may apply to this income, which affect how you report your PSI to us and the deductions you can claim.

 

Hope this helps.

 

Thanks

MayW

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Hi @AUUK-taxq

 

Use the Personal services income (PSI) decision tool on our website to work out whether you earned PSI, and if the PSI rules apply to that income.

 

The is Special tax rules (PSI rules) may apply to this income, which affect how you report your PSI to us and the deductions you can claim.

 

Hope this helps.

 

Thanks

MayW

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Newbie

Replies 2

The tool says the rules don't apply because
For this income I answer no to the below:

"Did you work for yourself, or for a business that was owned or partly owned by you or your associate?"

I don't own peoplebank. However my payslip and the information they lodged with ATO reports the income as "Attributed PSI".

Are you saying I should delete the prefill and copy it to the salary/wages section?
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ATO Certified Response

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Hi @AUUK-taxq

 

Thanks for your reply.

 

Personal services income (PSI) is income produced mainly from your personal skills or efforts as an individual. You indicated in your original post that you worked for Peoplebank as an IT contractor. You can receive PSI in almost any industry, trade or profession. Some common examples include financial professional and IT consultants.

 

Unless you were working for Peoplebank as an employee, you shouldn't be declaring what you were paid by them as salary or wages on your tax return.

 

You may want to have a look at the personal services income section of our website to find out more about what PSI is all about. We also recommend that you check out the PSI – completing your tax return page.

 

Hope this helps.

 

Thanks, ChrisR

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Newbie

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Hi Chris

 

How do I know whether or not I was an employee?

 

My payslip says labour hire, attributed PSI.

 

If the income is PSI then what is the answer to the original question?

 

How do I claim work-related deductions for this income? Based on the taxation rulings the deductions appear to be allowed (eg they are not mortgage payments, salaries, etc) however myTax does not allow them to be entered.

 

Thanks

Kieran

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ATO Certified Response

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Hi @AUUK-taxq

 

Thanks for your reply.

 

If you were an employee, you should have received a PAYG payment summary - individual non-business (refer to our website). The fact that you didn't suggests that you weren't being treated as an employee.

 

You will notice on our website that there are a number of different types of payment summaries. From what you have advised, it sounds like you have received a PAYG payment summary - business and personal services income. This payment summary isn't issued to employees.

 

If you want to find out more about the difference between employees and contractors, have a look at our website. If you think that you should be paid as an employee, we suggest that you have a chat with your employer.

 

It sounds like you are lodging your tax return using our online services (via myGov). If you received personal services income as a sole trader, we suggest that you look at the myTax 2019 Personal services income page for instructions on how to declare your income and claimable expenses in myTax.

 

If you're still not sure what you need to do, you can take advantage of our live chat service. This service can be accessed when you are in sections 3 (Personalise return) and 4 (Prepare return) of myTax. Refer to our website for further details.

 

Hope this helps.

 

Thnaks, ChrisR

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Newbie

Replies 2

Hi Chris

 

I have the same issue as @AUUK-taxq. The question for me is not about whether I have been paid correctly (I do contract consulting work, utilising a payroll management company (I do not operate as a company myself) which is classified as labour hire and thus my work is categorised as PSI); but about how I can claim work-related deductions. The information on PSI suggests that I should be able to claim work related deductions such as expenses associated with working from home during COVID, but it doesn’t explain how to do that. If it’s not possible to do it in MyTax because I don’t have wages/salary; then where do I go to claim those expenses? Do I have to do it through the business portal instead…but, I didn’t think I operated that way and so have used just MyTax in the past.

 

If you can advise how to go about claiming work related deductions when you are working in a labour-hire arrangement and thus earning PSI, that would be much appreciated!

 

Kind regards

Newbie

Replies 1

Hi @KDAV 

 

The information provided above by Chris and Megan is incorrect. The live chat was also useless. After a couple of tries I got through to someone on the phone who actually understood what attributed PSI is and they were able to advise me how to handle this:

 

  1. Go to 'Business/sole trader, partnership and trust income (including loss details)'
  2. Under 'Business income statements and payment summaries' you should see the payroll company info, income and tax witheld prefilled
  3. In this section select payment type: 'Labour hire' and income type: 'Personal Services Income'
  4. Now go to 'Personal services income' you should see the income and tax withheld populated
  5. In this section go to Deductions and then 'Total amount of other deductions against PSI – manually calculated' type in your work-related deductions 

Screenshot with my info removed: https://ibb.co/2gqmMmc 

 

Remember:

  • All the normal rules apply to the deductions, keep records
  • Don't accidentally double-count donations/etc which should still go in the relevant section

Cheers

 

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Newbie

Replies 0

Thanks @AUUK-taxq

Really appreciate it. I missed that entry item when I looked through previously