Allocation of professional firm profits – PCG 2021/4 guide and calculator (2026 edition)
Since 1 July 2022, the ATO has applied PCG 2021/4 to individual professional practitioners (IPPs) who redirect profits from their professional firm to associated entities. Getting the gateways and risk assessment factors right can be the difference between a green zone and an ATO review.
Insyt's practical guide and calculator walk you through each step, so you can assess your clients' arrangements quickly and with confidence.
About the Calculator
The Excel calculator works out RAF 1, RAF 2 and the optional RAF 3, aggregates the score and returns a green, amber or red zone:
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Updated for 2025/26 tax rates.
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Tested against the PCG's worked examples and case studies.
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Includes a gateway check and plain-English notes on each factor.
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RAF 3 is only counted when a remuneration benchmark is entered.
About the Guide
The Guide covers:
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Who PCG 2021/4 applies to, and when an arrangement is outside its scope.
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Gateway 1 (commercial rationale) and the five Gateway 2 high-risk features.
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Risk assessment factors 1, 2 and 3, with worked examples.
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How the ATO calculates the effective tax rate, including the "larger of" comparison.
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The ATO's clarifications on the effective tax rate denominator and on income from unrelated entities.