Finance and tax

Net personal services income entity loss

An individual's deduction for an attributed net personal services income loss of a personal services entity.

Reviewed 30 July 2026Income years 2025-26 and 2026-27

Who can claim

This deduction is available to individuals.

  • A personal services entity has a net personal services income loss attributable to your personal efforts or skills.
  • The attribution and personal-services-income rules make the loss deductible to you.

What you cannot claim

  • Do not claim an entity's ordinary business loss under this label.
  • Amounts denied by the personal-services-income deduction limitations remain excluded.

How the amount is worked out

Calculate the entity's net PSI loss under the attribution rules and claim only the amount attributable and deductible to the individual.

Records the ATO expects

  • Entity tax calculation
  • PSI attribution statement
  • Contracts and income analysis
  • Deduction limitation worksheet

Where this rule comes from

Primary source: Income Tax Assessment Act 1997 section 86-27 (Sections 86-27 and 86-87). Reviewed 30 July 2026. Covers the 2025-26 and 2026-27 income years.

Supporting sources:

Next steps