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The 80% rule – Does it apply to my subbies?

The 80% rule, or test or 82/20 rule, is part of the personal services income regime under taxation laws.

Builders / Head Contractors

If you’re looking to engage a contractor to work for you, you shouldn’t be asking this question.  It does not apply to whether you can engage them or not.

The tests you need to apply to work out if they’re a contractor does not include the 80% rule.

More Information: Employee or Contractor

Contractor

This rule may assist to determine how your income is declared to the ATO and what tax deductions are available to you when preparing your tax return.

More Information: Personal Services Income

 

Simon Wilson