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AustraliaBAS & TaxUpdated: Sep 13, 2026
Validation Pending: The capabilities described for Australia are currently under review. Prefiler does not yet offer production-validated automated pre-filing intelligence for this jurisdiction.
Direct Answer
If more than 50% of your income is generated from your skills or physical labor (like an IT contractor), the ATO classifies it as PSI. If you do not pass the Results Test or the 80/20 rule, you are taxed as an individual, and corporate deductions are severely restricted.
The Bank Statement Test
Auditors look at your bank statements. If 100% of your company's revenue comes from a single recruitment agency or client in regular fortnightly installments, it looks exactly like a disguised employment relationship.
Deduction Limitations
If PSI rules apply, the company cannot retain profits to access the lower corporate tax rate, and cannot claim deductions for rent, spouse salaries (unless they perform actual principal work), or certain vehicle expenses.