Your Complete Guide to the Australian Business Number (ABN)
An Australian Business Number (ABN) is a unique 11-digit identifier that is essential for anyone running a business in Australia. But what exactly is it, who needs one, and how do you get it? This complete guide answers all your questions.
What is an ABN?
An Australian Business Number (ABN) is a unique identifier issued by the Australian Business Register (ABR), which is operated by the Australian Taxation Office (ATO). It is not a tax file number (TFN).
Think of it as a public-facing number for your business dealings. It allows the government, other businesses, and the public to identify your business for tax, invoicing, and official purposes.
Key things to know:
- It's free to apply for.
- It's not proof of a registered business name; you must register your name separately with ASIC.
- Having an ABN doesn't automatically mean you must register for GST.
Who Needs an ABN? (And Who Doesn't)
You are legally required to have an ABN if you are carrying on an enterprise or business in Australia. This includes:
- Sole Traders
- Companies
- Partnerships
- Trusts
- Not-for-Profit organizations
You should get an ABN if:
- You are starting a business with a GST turnover of $75,000 or more.
- You need to register for Goods and Services Tax (GST).
- You want to avoid Pay As You Go (PAYG) tax being withheld from your payments by other businesses.
Who doesn't need one?
If you are an employee receiving a salary or wages, you do not need an ABN. If your work is classified as an employee relationship but you are being asked to provide an ABN, this may be illegal "sham contracting."
Key Benefits of Having an ABN
1. Avoid Higher Tax Withholding
Without an ABN, other businesses that pay you are required to withhold tax at the highest marginal rate (47%) from your payment. An ABN prevents this.
2. Claim GST Credits
You can only register for GST and claim back GST credits on your business purchases if you have an ABN.
3. Energy Grants Credits
You need an ABN to claim energy grants credits (if eligible).
4. Business Identity
It gives your business legitimacy and is required for issuing tax invoices.
5. Domain Name Registration
An ABN is required to register a .com.au or .net.au domain name in Australia.
How to Apply for an ABN
Applying for an ABN is a free online process through the Australian Business Register (ABR).
Before you apply, make sure you have:
- Your Tax File Number (TFN) and the TFNs of any associates (e.g., partners, trustees).
- Proof of identity (Driver's license, Medicare card, Passport).
- Details about your business activities, including the intended start date.
- Your business location details.
- Details of any professional advisors (e.g., tax agent).
The Application Process:
- Go to the ABR website.
- Use the online application wizard. The system will guide you through a series of questions about your business structure and activities.
- Submit your application. If all the information is correct and verifiable, you will often receive your ABN immediately. In some cases, it may take up to 28 days if the ATO needs to perform manual checks.
Important: You must be entitled to an ABN. Applying for one when you are not running a business is illegal.
What to Do After You Get Your ABN
1. Register for GST
If your business has a GST turnover of $75,000 or more ($150,000 for non-profit organizations), you must register for GST. You can do this as part of your ABN application or separately at a later date.
2. Register Your Business Name
If you are trading under a name that is not your own personal name, you must register it with the Australian Securities and Investments Commission (ASIC).
3. Keep Your Details Updated
You are legally obliged to update your ABN details within 28 days of any change. This includes your address, business structure, or contact information.
Common ABN Questions (FAQs)
Q: Is an ABN the same as a TFN?
A: No. A Tax File Number (TFN) is for individuals and companies to manage their personal or company tax affairs. An ABN is a public number used for business transactions. A company will have both a TFN and an ABN.
Q: How much does an ABN cost?
A: It is completely free to apply for an ABN through the official ABR website. Be wary of third-party services that charge a fee to "help" you apply—they are often unnecessary.
Q: Can I use my ABN straight away?
A: Yes. Once issued, you can start using it immediately for invoicing, ordering supplies, and setting up business accounts.
Q: What happens if my ABN application is rejected?
A: The ATO will provide a reason. It is often due to insufficient evidence that you are running a business or incorrect information. You can re-apply once you have addressed the issue.
Q: Can my ABN be cancelled?
A: Yes. The ABR can cancel your ABN if it is no longer being used in the course of business, if your business structure has changed, or if you provided false information.
Need Help with Your ABN Application?
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