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    I have a small company with 3 income streams. One of these fails the PSI test and so must be attributed each BAS. My question is what happens to the attributed income – it’s in the company’s bank account but technically belongs to the worker who it has been attributed to… can I just transfer it to them or does it have to come out as tax-free dividends or something?

    Worker earns $30k in PSI income in a quarter
    Wages + super for the quarter totals $20k
    The extra $10,000 is attributed to the worker, so we pay an extra $3,000 (to keep it simple) in PAYG on the BAS.
    The remaining $7,000 is sitting in the company’s bank.

    Since the $7,000 will be included on the worker’s Tax Return, not the company’s, it seems to me that it should be given to the worker at some point. It can’t be paid as wages as the company would have to pay super + PAYG on it and that would be paying the PAYG twice. Can the company just transfer it to the worker’s account as “PSI Attribution” or something, or is there some other method for dealing with “leftover” PSI income?


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    Hi Toby,

    I’m not the right person to help you with your questions, but did want to welcome you to Flying Solo.

    Hopefully one of our tax specialists will be along to offer you some guidance soon, although I suspect that they may recommend that you discuss the situation with your accountant.

    Nice to have you on board :)

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