Tax Rules

Hi Scott, I am returning to work post-children. I recently started looking for a part-time job, during which time my husband asked me to do his books and admin work. I am legitimately doing two days’ work a week. When we visited an accountant my husband suggested paying me a wage, but the accountant said this is not possible under PSI tax rules (an associate for non-principal work). Is this true?

Danielle

Hi Danielle,

He can pay you … he just can’t claim a tax deduction for it under the PSI taxation rules. (For those of you reading along at home, Danielle is not talking about tyre pressure -- PSI stands for Personal Services Income). Simply put, your husband can’t claim a deduction for the salary he pays you, because you’re not involved in the principal work. Sounds like you have a good accountant!

Scott