Document ID: chunk:federal_register_of_legislation:C2025C00029:section:3:p17
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 3 (pt 17/34)
Character Range: 1702758–1705463

to whether it is the custom or practice, when work of the kind in question is performed by an entity other than an employee:
 (a) for the *personal services income from the work to be for producing a result; and
 (b) for the entity to be required to supply the *plant and equipment, or tools of trade, needed to perform the work; and
 (c) for the entity to be liable for the cost of rectifying any defect in the work performed;
as the case requires.

87‑20  The unrelated clients test for a personal services business
 (1) An individual or a *personal services entity meets the unrelated clients test in an income year if:
 (a) during the year, the individual or personal services entity gains or produces income from providing services to 2 or more entities that are not *associates of each other, and are not associates of the individual or of the personal services entity; and
 (b) the services are provided as a direct result of the individual or personal services entity making offers or invitations (for example, by advertising), to the public at large or to a section of the public, to provide the services.
Note: Sections 87‑35 and 87‑40 affect the operation of paragraph (1)(a) in relation to Australian government agencies and certain agents.
 (2) The individual or *personal services entity is not treated, for the purposes of paragraph (1)(b), as having made offers or invitations to provide services merely by being available to provide the services through an entity that conducts a *business of arranging for persons to provide services directly for clients of the entity.

87‑25  The employment test for a personal services business
 (1) An individual meets the employment test in an income year if:
 (a) the individual engages one or more entities (other than *associates of the individual that are not individuals) to perform work; and
 (b) that entity performs, or those entities together perform, at least 20% (by *market value) of the individual's principal work for that year.
 (2) A *personal services entity meets the employment test in an income year if:
 (a) the entity engages one or more other entities to perform work, other than:
 (i) individuals whose *personal services income is included in the entity's *ordinary income or *statutory income; or
 (ii) *associates of the entity that are not individuals; and
 (b) that other entity performs, or those other entities together perform, at least 20% (by *market value) of the entity's principal work for that year.
 (2A) If the *personal services entity is a partnership, work that a partner performs is taken, for the purposes of subsection (2), to be work that the personal services entity engages another entity to perform.