Address
{{propApi.title}}
{{propApi.text}} {{region}} Change location{{propApi.title}}
{{propApi.successMessage}} {{region}} Change location Address
{{propApi.title}}
{{propApi.text}} {{region}} Change location{{propApi.title}}
{{propApi.successMessage}} {{region}} Change locationMember and guest login
Enter your email and password to access secured content, members only resources and discount prices.
Did you become a member online? If not, you will need to activate your account to login.
If you are having problems logging in, please call HIA helpdesk on 1300 650 620 during business hours.
Forgotten password
Need some help?
If you are having problems logging in, please call HIA helpdesk on 1300 650 620 during business hours.
If the email address you have entered is registered, you will receive an email with further instructions.
Become part of the HIA community
Enables quick and easy registration for future events or learning and grants access to expert advice and valuable resources.
Create a guest account
Enter your details below and create a login
Alienation of Personal Services Income (APSI) and the results test
This policy confirms HIA's support of the APSI test to determine the status as an independent contractor.
Tuesday, 13th May 2025
HIA’s Position statement
- Greater consistency in the legal treatment of independent contractors and employees in relation to a range of Commonwealth and state legislation is of paramount importance to the residential building industry.
- HIA supports the inclusion of the Alienation of Personal Services Income (APSI) rules in the Income Tax legislation to allow tax payers to self-assess against the test of ‘independence’.
- The Commonwealth, State and Territory Governments should adopt a single national objective test of who should be treated as an independent contractor.
- The appropriate single national objective test is the ‘results test’ component of the Alienation Personal Service Income (APSI) rules.
- i) Once a person obtains an ABN they are and should be treated as a business for all purposes; and ii) The burden is on the regulator to prove otherwise.
Background
- Under the residential building industry subcontracting system, contractors provide their personal services to achieve work outcomes. They are small business persons who work for profit.
- A key component in preserving contracting independence is to ensure that contractors are treated as businesses by the tax laws, including being able to access business tax deductions.
- Income tax legislation adopts the Alienation of Personal Services Income Test (APSI) to differentiate independent contractor arrangements from PAYG employees in relation to taxation. Contractors who satisfy the APSI test qualify to utilise the business tax deductions regime.
- The APSI rules are intended to protect the integrity of the taxation system by preventing individuals who generate income from their personal services from reducing their liability to taxation by diverting income through a company, partnership or trust, and to clarify the work-related deductions available to the individual and interposed entity.
- APSI has two main elements. Firstly, the 'results test' which individuals can self-assess against. The results test is based on the traditional criteria used to distinguish independent contractors from employees, namely, working to produce a result; providing their own plant, equipment and tools of trade; and being liable to rectify defective work.
- Under the second element, if the results test is not satisfied, tax payers are able to move to other tests including the '80/20 rule', that the business employs its own workers and the unrelated clients test. A binding personal services business determination from the ATO is also available.
Policy endorsed by HIA National Policy Congress: May 2014; Re-endorsed with amendments 2020. Re-endorsed May 2025.
Share with your network:
More articles on:
Find the latest expert advice, guides and much more!
Was this page helpful?
Thank you for submitting your feedback.
HIA Advocacy
02 Oct
Draft Scrap Metal Dealers Bill 2025
HIA provided a response to the Draft Scrap Metal Dealers Bill 2025 (Draft Bill).
26 Sep
Proposed Working from Home Legislation
HIA provided feedback on the Victorian Government’s proposals to legislate a right for employees to work from home (WFH).
19 Sep
Statutes Amendment (Building and Construction Industry Review - Penalties) Bill 2025
HIA responded to the Draft Statutes Amendment (Building and Construction Industry Review – Penalties) Bill 2025, which proposes increased penalties and various new offences under the Building Work Contractors Act 1995, Fair Trading Act 1974 and Plumbers, Gas Fitters and Electricians Act 1995.
19 Sep
Draft Sunshine Coast Planning Scheme
HIA provided a submission on the Draft Sunshine Coast Planning Scheme to the Sunshine Coast Council.
17 Sep
Review of Western Australia's home building contract laws
HIA provided a further response to the Review of Western Australia’s home building contract laws. This submission supplements the positions put forward by HIA and its representative members at the industry consultation session on 24 July 2025.
15 Sep
The role of housing in a dynamic and resilient economy
The Productivity Commission’s (PC) Five Pillars of Productivity Inquiries take place against a backdrop of flatlining productivity in Australia, which is only set to erode living standards if not addressed. This HIA submission is in relation to the first pillar of the set of inquiries, titled ‘creating a more dynamic and resilient economy’.