You apply for an ABN yourself through the Australian Business Register at abr.gov.au, or through the Business Registration Service if you want an ABN plus other registrations in the one session. The application is free, there is no annual renewal fee, and if your identity details match ATO records the number is often issued on screen at the end of the application.
An ABN is never issued automatically. Registering a company with ASIC gives you an ACN, which is a different identifier, and the company still has to apply for its own ABN. The one thing no channel changes is entitlement: you must be carrying on or genuinely starting an enterprise in Australia, and the ABR can ask for evidence of that at any time, including after the ABN is issued.
This page covers who needs an ABN and who does not, what to have ready before you lodge, how the online, agent and paper routes compare, and the registrations that often sit alongside it, such as GST, PAYG withholding and a business name.
No, an ABN is never issued automatically. Registering a company with ASIC gives you an Australian Company Number (ACN), which is a different identifier. The ABN is issued separately by the Australian Business Register (ABR), and someone has to apply for it.
What confuses people is the Business Registration Service. If you set up your company through that service, you can apply for the ACN, the company's ABN, a company tax file number and GST registration in one sitting. It feels like the ABN "came with" the company, but it was a tick-box you completed in the application. Register directly with ASIC (or through a company formation agent that only does the ASIC step) and you will end up with an ACN and no ABN.
Here is who issues what:
| Identifier or registration | Issued by | How you get it |
|---|---|---|
| ACN | ASIC | Issued when the company is registered |
| ABN | Australian Business Register | You apply, free, and separate from the ACN |
| Company TFN | ATO | You apply, usually alongside the ABN |
| GST registration | ATO | You apply once you meet the turnover test, or voluntarily |
| Director ID | ABRS | Each director applies personally, no one can do it for them |
A company registered under the Corporations Act is entitled to an ABN, so the application is generally straightforward. In practice, a trading company will want one: without an ABN you cannot register for GST, you cannot lodge a business activity statement, and businesses paying you may be required to withhold tax from your invoices at the top rate because you have not quoted an ABN.
Do I need an ABN if I earn less than $75,000?
The $75,000 figure is the GST registration threshold, not an ABN threshold. There is no minimum income for an ABN. The test is whether you are carrying on an enterprise in Australia, a business or business-like activity, not how much it earns.
So a sole trader turning over $12,000 from freelance work is generally still required to have an ABN, but is not required to register for GST. A company with modest revenue is in the same position. Registration thresholds work like this:
- ABN: no turnover threshold, it depends on whether you are carrying on an enterprise.
- GST: required at $75,000 GST turnover or more ($150,000 for not-for-profits), with earlier registration available voluntarily.
- Taxi, limousine and ride-sourcing driving: GST registration is required regardless of turnover.
Do I need an ABN if I am self-employed?
Generally yes. If you invoice clients, set your own hours, use your own tools and carry the commercial risk of the work, you are running an enterprise and an ABN applies, whether you operate as a sole trader, a partnership, a trust or a company.
You do not need an ABN if you are an employee, even if the employer describes the arrangement as contracting. You also do not need one if the activity is a genuine hobby with no profit intent. If someone asks you to get an ABN so they can pay you as a contractor for work that looks and feels like employment, that is worth questioning before you apply.
What do I need to apply?
Have this ready before you start the application:
- Your TFN, and the TFNs of any associates, directors, partners or trustees.
- Proof of identity, and the ACN or ARBN if you are applying for a company or registered body.
- The entity type you are applying as, and the date you want the ABN to start.
- Your main business activity and industry, plus the addresses of your business locations.
- A contact person authorised to deal with the ABR and the ATO.
- The tax agent number, if an agent is applying for you.
Because the entitlement rests on carrying on an enterprise, keep whatever shows you have started or are about to start, signed contracts, quotes, a registered business name, supplier accounts, insurance, tools purchased. If the ABR asks follow-up questions, that material is what answers them, and it is also what supports the ABN if the ATO later reviews whether it should remain active.
There are three practical ways to apply for an ABN: do it yourself online through the Australian Business Register (ABR) or the combined business registration service on business.gov.au, have a registered tax agent or BAS agent lodge it as part of setting up your structure, or complete a paper application form obtained from the ATO. The application itself is free through the ABR regardless of channel, any cost you pay is for someone else's time or service, not for the ABN.
The differences come down to who does the typing, what else gets registered at the same time, and how much help you get with the judgement calls (entitlement, structure, GST, PAYG withholding).
| Option | Who lodges it | Cost of the ABN | Typical timing | Best suited to |
|---|---|---|---|---|
| Online, ABR or business.gov.au | You, using your own details and TFN | No government fee | ABN often issued on the spot when identity and details are verified; longer if the ABR needs to review or request more information | Sole traders and simple structures with a clear picture of what they're registering for |
| Registered tax or BAS agent | Your agent, through their agent channels | No government fee; agent charges their own professional fee, which varies by firm and scope of work | Depends on the agent's turnaround plus the same ABR processing rules | Companies, trusts, partnerships, or anyone wanting advice on structure, GST and withholding at the same time |
| Paper application form from the ATO | You, by post | No government fee; postage only | Slowest of the three, the form must be ordered, posted and manually processed | Applicants who can't use the online service, including those without reliable internet access |
| Private (non-agent) ABN service websites | A third party using the same ABR application | No government fee, but the site charges a service fee on top | Same ABR processing as any online application | Rarely necessary; check whether the site is a registered agent before paying |
Online through the ABR or business.gov.au. This is the default route for most people. The business.gov.au combined service lets you apply for an ABN and, in the same session, register a business name, apply for GST, PAYG withholding and other tax registrations, or set up a company. If your identity and details are verified against ATO records, the ABN can be issued immediately at the end of the application. If something can't be verified, a name mismatch, an unusual structure, an address issue, or an unclear description of your activity, the application goes to a reviewer and you'll be given a reference number to follow up. The ABR publishes current processing timeframes; check those rather than assuming.
Through a registered tax or BAS agent. An agent lodges the same application, but the value is in what happens around it: confirming you're actually entitled to an ABN (carrying on an enterprise, not simply working as an employee), choosing between sole trader, company, partnership or trust, deciding whether to register for GST now or later, and getting a TFN and ACN sorted where a new entity is involved. Fees vary widely and are usually quoted as part of a broader setup package, so ask what's included before you engage. Agent fees for managing your tax affairs are generally deductible, but confirm the treatment for costs of setting up a new entity with your agent.
Paper. Paper applications still exist and are legitimate, but you have to order the form, fill it in, post it, and wait for manual processing. Use this only if the online service genuinely isn't available to you.
Be careful with paid third-party sites. Search results for ABN registration include commercial sites that charge a fee to lodge the free ABR application on your behalf. Some are run by registered agents; some are simply form-filling services. Before you pay anything, check the provider's registration on the Tax Practitioners Board register, and be clear about whether you're paying for advice or just for data entry.
Whichever route you choose, the information required is the same: your TFN (and the TFNs of any associates, directors or partners), proof of identity details, the entity's structure, your business activity, the date you started or expect to start, contact and address details, and your ACN if a company is involved. Having those ready is what makes an online application quick, and having them wrong is the most common reason an application gets held up for review.
One point no channel changes: entitlement. An agent can't obtain an ABN you're not entitled to, and lodging online doesn't lower the bar. You need to be carrying on or starting an enterprise in Australia, and the ABR can ask for evidence of that at any time, including after the ABN is issued.
The ABN application itself is short, but it will not let you save and come back easily in every case, and it asks questions that are hard to answer off the top of your head. Gathering the details below first turns a frustrating half hour into about ten minutes.
Apply through the Australian Business Register at abr.gov.au, or through the Business Registration Service if you are setting up a company or several registrations at once. Applying direct is free. Plenty of third-party sites will lodge the same form for a fee, that is legal, but you are paying for convenience, not for a different outcome.
Work out your entitlement first
An ABN is for entities carrying on or starting an enterprise in Australia. The form asks you to confirm this, and you should be able to explain your answer if the ABR follows up. Before you start, be honest with yourself about which of these describes you:
- You are genuinely in business, invoicing clients, quoting for work, advertising, keeping records, intending to make a profit.
- You are about to start, and you have concrete steps to point to: signed contracts, tools or stock purchased, a website, quotes issued, licences applied for.
- You are an employee whose employer has asked you to get an ABN. This is the wrong reason. If the work is really employment, an ABN does not change that, and getting one to suit an employer's paperwork can create problems for both of you.
- You have a hobby that occasionally earns money. A hobby does not need an ABN, and you generally cannot claim business deductions against hobby income.
Keep whatever evidence you relied on. If the ABR asks for more information, or reviews your ABN later, the material sitting in a folder is what answers the question.
Decide your business structure before you apply
The ABN is issued to an entity, and the entity you nominate shapes the rest of the form. Changing structure later usually means a new ABN, not an edit to the old one, so this is worth a conversation with an accountant if you are unsure.
| Structure | Extra items to have ready |
|---|---|
| Sole trader | Your own TFN and identity details. Nothing is created before the ABN, you are simply registering yourself. |
| Partnership | Each partner's name, date of birth, TFN and residential address. A partnership TFN is normally applied for at the same time. |
| Company | Your ACN, registered with ASIC first (or apply for company and ABN together through the Business Registration Service). Director and shareholder details, plus each director's director ID. |
| Trust | The trust deed, the trust's name and date of establishment, and full details for the trustee, including the trustee company's ACN if the trustee is a company. |
Details the form will ask for
- Tax file number(s). Yours, and the TFN of every associate, partners, directors, trustees, public officers. Supplying TFNs is not compulsory, but leaving them out slows the application and often means it cannot be processed on the spot.
- Proof of identity information. Name exactly as the ATO holds it, date of birth, and previous names if your ATO records are under a maiden name. Mismatches are the single most common cause of an application being held for manual review.
- Any previous ABN. If you have held one before, even years ago and even if it is cancelled, have the number ready. In many cases a lapsed ABN can be reactivated rather than replaced.
- Business start date. The date your enterprise started or will start. You can nominate a past date, but only back to when you genuinely began the enterprise, and you should be able to substantiate it.
- Main business activity. Describe what you actually do in plain terms, "residential plumbing repairs", "freelance graphic design", and the form matches it to an industry code. Choose the activity that produces most of your income.
- Addresses and contacts. Your main business address (a physical address, not a PO box), a postal address, phone, and email. Use an email you will still have access to in five years; ABR and ATO correspondence goes there.
- Authorised contact. The person the ABR can speak to about the application. If that is your accountant or tax agent, have their name and details on hand.
Registrations to consider at the same time
The same application can add other registrations, which saves you lodging separately later. Decide in advance which you need, because each one brings its own reporting obligations:
- GST, mandatory once your turnover reaches the registration threshold, and compulsory from the first dollar for taxi, ride-sourcing and limousine services. Registering voluntarily below the threshold is a choice with trade-offs, so think it through rather than ticking the box by reflex.
- PAYG withholding, if you will pay employees, or pay contractors under a voluntary agreement, or make payments where no ABN was quoted.
- Business name, an ABN is not a trading name. If you want to trade as something other than your own legal name, you register a business name with ASIC, and you need the ABN (or at least the application reference) to do it.
- Fuel tax credits, wine equalisation tax, luxury car tax, only if they apply to your industry.
If you are registering for GST or PAYG withholding, have your business bank account details available so refunds and credits can be paid to the right account.
Set up your digital identity
You do not need myID (formerly myGovID) to apply for an ABN, but you will need it soon afterwards to link your ABN in Relationship Authorisation Manager and access Online services for business, or to lodge activity statements yourself. Setting up myID with a Standard identity strength before you apply means you can act on your new ABN straight away. If you do not hold Australian identity documents at Standard strength, allow extra time, that step can take longer than the ABN application itself.
A short pre-lodgement checklist
- Structure decided, and any ASIC registration done first if you are using a company or corporate trustee.
- TFNs and identity details for yourself and all associates, matching ATO records.
- Start date you can justify, plus the evidence behind it filed away.
- Business activity described in plain words.
- Physical business address, postal address, phone and a durable email.
- Decisions made on GST, PAYG withholding and business name.
- Bank account details if you are adding tax registrations.
Once you submit, you may receive your ABN immediately on screen, or the application may be referred for review, usually because identity details did not match, or because the ABR wants more information about the enterprise. Either way, print or save the confirmation screen and the reference number before you close the browser. If you are asked for more information, respond within the timeframe in the letter; a request left unanswered generally results in a refused application, and you start again.
An Australian Business Number is the identifier the ATO, your clients and other government agencies use to recognise your business. It is not a licence to trade and it is not a tax file number, it is the reference that ties your invoices, your GST reporting and your business dealings together. If you are carrying on an enterprise as a sole trader, partnership, company or trust, you generally need one before you can do the practical things a business has to do.
In day-to-day terms, an ABN lets you:
- quote a number on invoices so clients can pay you in full;
- register for GST and claim GST credits on business purchases;
- register a business name and secure an .au domain;
- deal with the ATO and other agencies through business online services;
- identify yourself to suppliers, insurers and platforms that will not onboard you without one.
The invoicing point matters most. If you supply goods or services to another business and do not quote an ABN on your invoice, the payer is generally required to withhold tax from the payment at the top marginal rate plus the Medicare levy and send it to the ATO. You can get that money back through your tax return, but you have effectively lent it to the government for a year. Check the current no-ABN withholding rate on the ATO website before you assume the amount.
GST is separate from your ABN. Having an ABN does not make you registered for GST. You must register for GST once your GST turnover reaches the registration threshold ($75,000 for most businesses, $150,000 for not-for-profits, and from the first dollar for taxi, limousine and ride-sourcing services). You can register voluntarily below the threshold, but then you must charge GST, lodge activity statements and stay registered for at least 12 months. Confirm the current thresholds with the ATO, as they can change.
If you are registered for GST, a valid tax invoice needs your business or trading name, your ABN, the date, a description of what was sold, the GST amount (or a statement that the total price includes GST), and the buyer's identity or ABN for sales of $1,000 or more.
How do I get an ABN for free? Apply directly through the Australian Business Register at abr.gov.au. There is no government fee. You will need your tax file number, your business structure, the date you started or intend to start, your main business activity and your contact and address details. Private websites that offer to "process" your ABN charge a service fee for something you can do yourself at no cost, and a registered tax agent or BAS agent can also lodge it for you as part of a broader setup, which is a legitimate professional fee rather than a charge for the number itself.
Can I get an ABN immediately? Often, yes. If your identity details match ATO records and your answers show you are entitled, the ABR can issue your ABN on screen at the end of the application. If anything needs checking, a mismatch in your details, a previously cancelled ABN, or an entitlement question, the application is referred for manual review and you are given a reference number and an expected timeframe. Do not promise a client an ABN by tomorrow; apply before you need it.
Do you pay more tax if you have an ABN? No. The income tax rates that apply to a sole trader are the same individual rates that apply to a wage earner, and the same tax-free threshold applies to your total income for the year. What changes is the timing and the paperwork:
| Employee (TFN, wages) | Sole trader (ABN, business income) | |
|---|---|---|
| Tax taken out as you earn | Employer withholds PAYG from each pay | Nothing withheld; you set money aside yourself |
| How tax is paid | Balanced at your annual return | Annual return, plus PAYG instalments once the ATO enters you into the system |
| Deductions | Work-related expenses | Business expenses, reported on the business schedule of your individual return |
| GST | Not applicable | Applies once registered |
The reason ABN work feels like more tax is that the whole amount lands in your account and the bill arrives later. A practical habit is to move a set percentage of every payment into a separate account for tax and, if registered, GST, and to reconcile it when you lodge. Companies and trusts are taxed differently again, so get advice before choosing a structure on tax grounds.
Can I have an ABN but not use it? You can hold an ABN without invoicing anyone in a given period, but the test is entitlement, not activity. You must be carrying on an enterprise or genuinely intending to start one. If you have stopped for good, the side business wound up, you went back to full-time employment, you are required to cancel the ABN, generally within 28 days of the change. The ATO also reviews ABNs that show no business activity across lodgements and may cancel them, so if yours is dormant but real (a seasonal business, or a start-up still in the planning stage), keep your details current and lodge what is required so it is not cancelled by default. Reactivating is possible, but it is easier to keep an entitled ABN alive than to explain a cancelled one to a client mid-job.
Does ABN get super? As a sole trader working under your own ABN, no one pays super guarantee on your behalf. Your clients pay your invoice, not your super. If you want super, you contribute to your own fund and may be able to claim a deduction for personal contributions, that requires lodging a valid notice of intent to claim with your fund and getting its acknowledgement before you lodge your return, and contributions count towards the annual contributions caps.
There is an important exception. Holding an ABN does not automatically make you a contractor for super purposes. If your contract is wholly or principally for your labour, you are paid mainly for your own personal work rather than to produce a result, you cannot delegate the work, and you do not supply the substantial plant or equipment, the person paying you may be required to pay super guarantee for you even though you invoice under an ABN. Sham arrangements, where an employee is asked to get an ABN to make the relationship look like contracting, do not change the underlying obligation. If you are unsure which side of the line you sit on, the ATO's employee/contractor guidance and its super guarantee eligibility tool are the place to check, and it is worth resolving before the first invoice rather than after twelve months of them.
These are two separate registrations, on two separate registers, doing two different jobs. An ABN identifies you, the entity carrying on the enterprise. A business name registration records the name you trade under when that name isn't your own. Getting one does not give you the other.
The ABN sits on the Australian Business Register, administered by the Australian Taxation Office. Business names sit on the Business Names Register, administered by ASIC. Both are searchable through ABN Lookup, which is why a client who searches your ABN can see any business names attached to it.
What each registration actually gives you
| Registration | Registered with | What it does | What it does not do |
|---|---|---|---|
| ABN | Australian Business Register (ATO) | Identifies your entity for tax and business dealings; lets you issue tax invoices without having tax withheld at the top rate | Does not reserve or protect any name; is not a licence to trade in a regulated occupation |
| Business name | ASIC | Lets you legally trade under a name that isn't your own legal name; links that name to your ABN publicly | Does not create a separate legal entity, and does not give you exclusive rights to the name |
| Company name | ASIC | Creates a company as its own legal entity with an ACN; the company name is registered as part of incorporation | Does not come with an ABN, the company must apply for its own ABN separately |
| Trade mark | IP Australia | Gives enforceable rights to use a name, logo or phrase for the goods and services it covers | Does not let you trade under that name without the relevant ABN or business name registration |
When you don't need a business name at all
If you trade under your own name, your first name and surname, exactly as they appear on your ABN record, you don't need to register a business name. A sole trader called Priya Raman can invoice as "Priya Raman" with her ABN on the invoice and nothing more.
You cross into business name territory as soon as you add something. "Raman Bookkeeping", "Priya's Mobile Dog Wash" or "PR Consulting" are all names other than your own, and each needs to be registered before you trade under it. Adding a descriptor to your surname is enough to trigger the requirement.
Partnerships work the same way: a partnership trading under the partners' own names doesn't need a business name, but anything else does.
What happened to "trading names"
Before ASIC's national register began, businesses could record a "trading name" against their ABN, and state-based registers handled the rest. Those legacy trading names were displayed on ABN Lookup for a transition period and have since been removed. If you were relying on an old trading name, the only way to keep using it is a current ASIC business name registration.
So if a client says they can't find your trading name on ABN Lookup, that's usually the reason, the name was never migrated across as a registered business name.
The practical order of steps
- Apply for the ABN first. You cannot complete a business name registration without an ABN or, at minimum, an ABN application reference number.
- Search the name. Check ASIC's business names register, ABN Lookup and IP Australia's trade mark search. A name that's already a registered trade mark can create problems even if ASIC accepts your registration.
- Check the domain. A .com.au or .net.au domain requires an Australian presence such as an ABN, ACN or trade mark, so it's worth confirming availability at the same time.
- Register through ASIC Connect. You choose a registration period of one year or three years. Fees change over time, so check ASIC's current schedule rather than relying on a figure you saw quoted somewhere.
- Diarise the renewal. ASIC sends a renewal notice, but the obligation to renew is yours. A lapsed business name can be picked up by someone else.
Which name goes where
Your legal name is the entity that owns the business: your own name as a sole trader, the partners' names, the trustee, or the company's full name including "Pty Ltd". Your business name is the public trading name.
- Tax invoices: show your ABN and either your legal name or your registered business name.
- Contracts, leases and finance documents: use the legal name. A business name can't sign anything, because it isn't a legal person.
- Bank accounts: the account is opened in the legal name, often with the business name as a trading-as reference.
- Bookkeeping records: keep them under the entity, not the name. If one ABN holds three business names, that's still one set of books and one tax return.
Keeping the two registrations in sync
A business name is tied to the ABN it was registered against. If you cancel that ABN, because you've closed the sole trader operation and moved into a company, for example, the business name registration is affected and will need to be transferred to the new ABN. Transferring involves the current holder consenting and the new holder accepting; it isn't automatic, and it's a common thing to overlook when restructuring.
Also keep your addresses current on both registers. ASIC and the ATO send notices to the addresses they hold, and a renewal notice that goes to an old address is still considered served.
One ABN can carry as many business names as you need, which is the usual approach when a single entity runs several distinct brands. What it can't do is split your tax position, the ABN, not the business name, is the entity that reports the income.
An ABN is rarely the only registration a new business needs. It is the identifier that ties the others together, so it usually makes sense to sort out your structure first, then work through the registrations that apply to how you actually operate, whether you employ people, what you sell, and how much you expect to turn over.
The list below covers the registrations most commonly needed by Australian small businesses. Not all of them will apply to you, and some are administered by the ATO, others by ASIC, and others by your state or territory government.
Registration overview
| Registration | Who typically needs it | Where you apply |
|---|---|---|
| Australian Company Number (ACN) | Anyone operating through a company, this comes before the ABN | ASIC (or via a registered agent) |
| Australian Business Number (ABN) | Sole traders, partnerships, companies and trusts carrying on an enterprise | Australian Business Register (ABR) |
| Tax file number (TFN) | Partnerships, companies and trusts need their own TFN; sole traders use their individual TFN | ABR, usually at the same time as the ABN |
| GST | Businesses over the turnover threshold, plus taxi, limousine and ride-sourcing drivers regardless of turnover | ATO, via the ABR application or later online |
| PAYG withholding | Anyone paying employees, or paying certain contractors under a voluntary agreement | ATO |
| Business name | Anyone trading under a name that is not their own personal name or their company's full name | ASIC Connect |
| Fringe benefits tax (FBT) | Employers providing benefits such as cars, entertainment or loans to staff | ATO |
| Payroll tax | Employers whose wages exceed their state or territory threshold | State or territory revenue office |
| Workers compensation | Almost all employers, in every state and territory | State or territory scheme insurer |
Company registration comes before the ABN
If you have decided on a company structure, register the company with ASIC first. ASIC issues the ACN, and the ABN application then asks for that number so the ABN can be linked to the correct legal entity. Applying for an ABN before the company exists means applying for the wrong entity type and having to start again.
Trusts work differently. The trust deed needs to be executed before you apply, because the ABN belongs to the trust and the application asks for details of the trustee and the date the trust was established.
GST: when registration becomes compulsory
GST registration is compulsory once your GST turnover reaches $75,000 (or $150,000 for a not-for-profit organisation). You also have to register if you drive for a taxi, limousine or ride-sourcing service, no matter how little you earn from it.
Two points catch people out:
- Turnover is projected, not just historical. If you can reasonably expect to hit the threshold in the next 12 months, the obligation starts then, you do not wait until you have banked the money.
- Turnover is per entity, not per activity. If you run two side businesses under one ABN, their turnover is combined.
Voluntary registration below the threshold is allowed. Whether it suits you depends on who your customers are, how much GST you pay on your own purchases, and whether you are willing to lodge business activity statements. Businesses selling mainly to GST-registered customers often register early; those selling to consumers and buying little often do not.
Registrations that depend on employing people
The moment you take on your first employee, several obligations start together:
- PAYG withholding, register with the ATO before the first pay run, so you can withhold tax and report it.
- Single Touch Payroll, you report each pay event to the ATO through STP-enabled software rather than registering separately.
- Superannuation, no registration is needed, but you need a way to pay contributions to each employee's fund by the quarterly due dates.
- Workers compensation, arranged through your state or territory scheme, usually within a set number of days of hiring.
- Payroll tax, thresholds and rates differ in every state and territory, and grouping rules can pull related businesses together, so check with your own revenue office rather than assuming another state's figure applies.
Contractors can create obligations too. If you pay contractors in the building and construction industry, or in cleaning or courier services in some jurisdictions, there may be reporting requirements even though you are not withholding tax.
Business names, domains and digital access
A business name is not a structure and gives you no ownership of the trading name, it simply records who is behind the name. You need an ABN, or at least an ABN application reference number, before ASIC will register one. If you want exclusive rights to a name or logo, that is a trade mark application through IP Australia, which is a separate process.
An ABN or ACN is also required to register a .com.au or .net.au domain, and the name generally has to relate to your business or trading name.
Finally, set up your digital access early. To manage ABN details, add tax registrations or lodge activity statements online, you will need a Digital ID (myID) linked to your business through Relationship Authorisation Manager. Doing this before you need to lodge something avoids a scramble against a deadline.
Industry licences sit outside the tax system
None of the registrations above give you permission to trade. Food handling, building work, electrical work, liquor, childcare, security, transport and many other activities need licences from a state, territory or local authority. The Australian Business Licence and Information Service (ABLIS) is the usual starting point for working out which ones apply to your activity and location.
An ABN application is lodged through the Australian Business Register (ABR) at abr.gov.au, or through the government's Business Registration Service at register.business.gov.au if you want to apply for an ABN and other registrations in the one session. Both are official government channels. You do not need an accountant, a tax agent or a third-party website to apply, although you can use one if you would rather someone else handled it.
The application itself is free. There is no government fee to apply for an ABN, no charge if your application is approved, no annual renewal fee, and no fee to cancel an ABN. An ABN does not expire, so there is nothing to pay to keep it active.
Where costs do appear, they are for something other than the ABN:
| Item | Who charges it | Cost |
|---|---|---|
| ABN registration | Australian Business Register | No fee |
| Business name registration | ASIC | Fee applies, ASIC publishes current amounts for one-year and three-year periods |
| Company registration (ACN) | ASIC | Fee applies, see ASIC's current fee schedule |
| GST, PAYG withholding registration | ATO | No fee |
| Lodging the application on your behalf | Tax agent, BAS agent or private service | Their own service fee |
Be careful with commercial websites that advertise "ABN registration" for a set price. Some are legitimate agents charging for their time; others simply complete the free government form and keep the difference. If you are paying, you should be clear about what the fee actually covers.
Before you start, gather:
- Your tax file number, plus the TFNs of any partners, directors, trustees or other associates
- Your ACN or ARBN, if you are applying for a company or registered body
- Any previous ABN you have held
- Your business structure, sole trader, partnership, company, trust
- A description of your main business activity, so the form can match it to an industry code
- Your business address, postal address, email and phone number
- The date you want the ABN to start, which can be a past date if you have already begun trading
- Details of any authorised contacts who can deal with the ABR on your behalf
Working through the form. The online application asks you to confirm you are carrying on or starting an enterprise in Australia, an ABN is for people in business, not for employees. You then answer questions about your structure, your activity and your associates. The form only shows the questions relevant to your answers, so a sole trader sees far fewer screens than a trust. Most people finish in one sitting; if you do stop partway, note the reference number so you can return to a saved application.
Adding other registrations. The same session can cover GST, PAYG withholding, fuel tax credits and a business name, and you can register for a business name only after the ABN application is under way, because the name has to attach to an ABN. Choosing GST here does not commit you to anything you would not otherwise be required to do, but it does mean you will start reporting from the date you nominate.
What happens after you submit. If your identity and details are matched successfully, the ABN appears on screen straight away and a confirmation letter follows. Print or save that screen. If something needs checking, a mismatched TFN, an unusual structure, or an activity that raises a question about whether you are genuinely in business, the application is referred for manual review and the ABR will contact you or write to you. You will be given a reference number to quote in the meantime. The acknowledgement will tell you the timeframe the ABR is currently working to; there is no way to pay to speed this up.
If the application is refused, you will receive written reasons and information about your review rights. A refusal usually turns on whether the activity you described is an enterprise rather than a hobby or an employment arrangement, so it is worth reading the reasons carefully before reapplying with the same description.
Once you have the ABN. Search your details on ABN Lookup and check that the entity name, business name, state and postcode are right. Set up a myID (formerly myGovID) and link it in Relationship Authorisation Manager so you can update your own details later. You are required to keep your ABN details current and to notify changes within 28 days, that includes a new address, a change of associates, and telling the ABR if you stop your business activity so the ABN can be cancelled.
An Australian Business Number (ABN) is an 11-digit identifier issued by the Australian Business Register (ABR), which the ATO administers. It is your business's public reference number for dealing with government agencies, other businesses and your customers. It is not a licence, a permit, or a company, it is an identifier attached to a particular entity.
You can hold an ABN as a sole trader, a partnership, a company, a trust or an incorporated association. The ABN belongs to that entity, not to you personally as a human being. A sole trader ABN follows the individual; if you later set up a company, the company needs its own ABN.
What the number actually lets you do. An ABN is the gateway to most of the tax and business registrations you are likely to need:
| Function | Why the ABN matters |
|---|---|
| Invoicing other businesses | You quote it on invoices so the payer can identify you and process the payment normally rather than withholding tax from it |
| GST | You cannot register for GST, issue a valid tax invoice, or claim GST credits without one |
| PAYG withholding | Required before you can register to withhold tax from wages you pay staff or contractors |
| Business name | ASIC requires an ABN (or an ABN application reference) before you can register a trading name |
| ATO online services for business | Your digital ID is linked to the ABN so you can lodge activity statements and manage registrations |
| Fuel tax credits, wine equalisation tax, luxury car tax and similar | All are registrations that sit under an ABN |
| .au domain names | Eligibility for most commercial .au domains is checked against an ABN |
What it does not do. This is where the confusion usually sits. An ABN does not make you GST-registered, that is a separate step, and whether you need it depends on your turnover and the kind of work you do. It does not give you a separate tax return: as a sole trader you still report business income and deductions in the business schedule of your individual tax return, under your TFN. It does not create an entitlement to deductions you would not otherwise have, and it does not decide whether you are an employee or a contractor, the working arrangement itself does that, no matter what number appears on the invoice.
Entitlement, not choice. You can only hold an ABN if you are carrying on or have genuinely started an enterprise in Australia. Selling a few unwanted items, a hobby that never intends to make a profit, or work you do as an employee will not qualify. Applying with no enterprise behind it is a common reason applications are refused or later cancelled, and the ABR can ask you to substantiate what your business actually does.
Your ABN details are public. ABN Lookup shows the entity name, ABN status and its dates, entity type, any registered business names, GST registration dates, and the state and postcode of the business location. Your street address, email and phone number are not published. If you trade from home and only want a suburb-level presence on the register, keep that in mind when you nominate your main business location.
Numbers that are not the same thing. A TFN identifies you (or your entity) for income tax. An ACN is issued by ASIC when a company is incorporated, and a company has both an ACN and an ABN, the ABN is usually the ACN with two extra digits in front. An ABN is not a substitute for occupational licensing, council approvals, or insurance.
You are expected to keep it current. Details such as your address, contact person, business activity and associates need to be updated within the period the ABR sets, and if you stop trading you are meant to cancel the ABN rather than leave it dormant. An unused ABN sitting open can attract review activity and, if you were registered for GST, leaves activity statement obligations running in the background.
An ABN is never deleted. When a business stops trading, the ABN is cancelled, it stays on the Australian Business Register permanently, linked to the same entity and, for sole traders, to the same tax file number. So if you're starting up again, the usual outcome is that you get your old number back rather than a new one.
This matters more than people expect. A reactivated ABN keeps your existing history on ABN Lookup, which clients and payers can see, and it means old invoices, contracts and supplier accounts still reference a valid number.
Step 1: Check the status of your old ABN
Search the number (or your name) on ABN Lookup at abr.business.gov.au. The record will show one of the following:
- Active, nothing to reactivate. You can start trading and simply update your details.
- Cancelled, with a cancellation date, this is the one you reactivate.
- No record found, you may be searching the wrong number, or the ABN was held by a different entity (a partnership or company, not you personally).
Note the cancellation date. If you kept trading past it, you'll need to think about backdating (see below). Also note that the ATO cancels ABNs it believes are inactive, for example, where no business activity statements or tax returns have been lodged, so you may find yours cancelled even if you never asked for it.
Step 2: Work out whether the old ABN can be reused at all
Reuse depends entirely on whether the entity is the same. An ABN belongs to the entity, not to the business idea or the trading name.
| Your situation | What happens to the ABN |
|---|---|
| You traded as a sole trader, stopped, and are now starting again as a sole trader | Your original ABN is reactivated. A sole trader only ever holds one ABN, regardless of how many businesses you run. |
| You were a sole trader and are now setting up a company | The company is a separate entity and needs its own new ABN. Your personal ABN stays cancelled unless you also trade in your own name. |
| The old ABN belonged to a partnership that has dissolved | A new partnership, even with the same people, is generally a new entity and needs a new ABN. |
| The old ABN belonged to a company that is still registered with ASIC | The company can reactivate its own ABN, provided the ACN is still active and the company is carrying on an enterprise. |
| The old ABN belonged to a company that has been deregistered | The ABN cannot be revived. A deregistered company no longer exists as an entity. |
| The old ABN belonged to a trust | The trust holds the ABN, not the trustee. If the same trust continues, the same ABN applies. |
Step 3: Apply through the standard ABN application
There is no separate "reactivation" form. You lodge the ordinary ABN application at abr.gov.au and the system matches your identity details to the cancelled record.
- Go to the Australian Business Register and start a new ABN application.
- Enter the entity details, including your TFN (for sole traders) or the ACN (for companies).
- When prompted, indicate that you have held an ABN before and enter the old number if you have it.
- Answer the entitlement questions about the enterprise you're now carrying on, what you do, where, and how you find customers.
- Nominate a start date for the reactivated ABN.
- Review, submit, and record the reference number the system gives you.
If everything matches and your answers establish entitlement, the ABN is often reissued on the spot. If the ABR needs to look at it manually, common where there are outstanding lodgements, an unusual backdate request, or identity details that don't line up, you'll get a reference number instead and a request for more information. Keep that reference number; it's how you follow the application up by phone.
Step 4: Update everything on the record
A reactivated ABN comes back with whatever details were last recorded, which may be years out of date. You're obliged to keep the register current and to notify changes within 28 days of becoming aware of them. Check and correct:
- Business, postal and email addresses, and phone numbers
- Your main business activity and the ANZSIC code that describes it
- Authorised contacts and associates (partners, directors, trustees, public officer)
- Bank account details used for refunds
- Any trading or business names shown against the ABN
You can update most of this through the ABR's online services using your Digital ID (myID) linked in Relationship Authorisation Manager, or ask your registered tax or BAS agent to do it.
Registrations that do not come back on their own
Reactivating the ABN does not restore anything you cancelled alongside it. Each of these is a separate registration and needs its own application.
| Registration | What you need to do |
|---|---|
| GST | Register again if your projected GST turnover will reach the registration threshold ($75,000 for most businesses, $150,000 for non-profit bodies), or if you drive taxis or ride-source. You can also register voluntarily below the threshold. |
| PAYG withholding | Register before the first payday if you'll be paying employees or withholding from contractors who don't quote an ABN. |
| Fuel tax credits, wine equalisation tax, luxury car tax | Reapply if relevant to the business. |
| Business name (ASIC) | A business name must be held against an active ABN. If the name lapsed while the ABN was cancelled, check ASIC Connect, it may have been released and taken by someone else, in which case you'll need to register a different name. |
| Licences and permits | State and local registrations (trade licences, food permits, council approvals) are administered separately and are unaffected by ABN status. |
Backdating the start date
You can ask for the reactivated ABN to start from a past date, and this is worth doing if you've genuinely been trading since then, for example, you took on work before realising the ABN had been cancelled for inactivity. The ABR expects the date to reflect when you actually began carrying on the enterprise, and a request that reaches back a long way is more likely to be reviewed rather than approved automatically.
Have supporting material ready: invoices you issued, contracts, bank statements showing business income, or purchase records for tools and stock. How far back the ABR will accept depends on the strength of that evidence and the circumstances, so there's no fixed cut-off you can rely on. Be aware that a backdated ABN can also backdate obligations, if you're required to be registered for GST from that date, the activity statements for the intervening periods become due.
If the application is refused or held up
The most common reasons a reactivation stalls are:
- Entitlement not established, the answers suggest a hobby, a one-off transaction, or employment rather than an enterprise. You can reapply with a fuller description of the business, or ask the ATO for a private ruling if the status is genuinely arguable.
- Outstanding lodgements, unlodged returns or activity statements from the earlier period. Bring these up to date; the reactivation doesn't extinguish them.
- Identity details that don't match, a name change, or a TFN recorded differently. Contact the ATO to align your details first.
If your application is refused, the ABR must tell you why, and you can lodge an objection. In practice, most refusals are resolved by explaining the business more precisely rather than by formal review.
Practical points worth knowing
- You can hold only one ABN per entity. Multiple businesses run as a sole trader all sit under the same ABN, you register additional business names against it, rather than getting extra numbers.
- Don't apply for a new ABN to avoid old obligations. The register links entities by TFN and ACN, so a second application generally just reactivates the original.
- Tell your payers. If a client withheld tax from you at the no-ABN rate while your number was cancelled, give them the reactivated ABN in writing so withholding stops.
- Keep the old records. Records from the earlier period of trading still need to be retained for five years from when they were prepared or the transaction completed.
- Check ABN Lookup afterwards. Confirm the status shows Active and that the details clients see, including any business names, are the ones you want displayed.
Short answer: there is no law that says every person earning money must hold an ABN, but if you are genuinely carrying on an enterprise, trading without one creates real practical problems, and it is usually the wrong choice.
An ABN is compulsory in some situations and effectively unavoidable in others. It becomes mandatory once you need to register for GST, because you cannot register for GST without an ABN. It is also required if you want to register a business name with ASIC, and many suppliers, platforms and government portals will not deal with you without one.
The first question is whether you have a business or a hobby. The ATO looks at the substance of what you do, not what you call it. Factors that point towards a business include:
- An intention to make a profit, and a plausible way of doing so
- Repetition and regularity in your activities
- Operating in a business-like way, invoices, records, a separate bank account, advertising
- Size and scale consistent with a commercial operation
- Activity of the same kind carried on by others in the trade
If your activity is a genuine hobby, occasional, not profit-driven, not run commercially, you are not carrying on an enterprise and you are not entitled to an ABN. You can keep doing it without one.
The main obstacle: no-ABN withholding. When you supply goods or services to another business and do not quote an ABN on your invoice, the payer is generally required to withhold tax from the payment at the top rate (currently 47%) and send it to the ATO. You get the credit back when you lodge your tax return, but the cash sits with the ATO in the meantime, and most business customers simply will not take on the paperwork. Withholding does not apply where the total payment is $75 or less, excluding GST.
If you genuinely do not need an ABN, the way around this is the ATO's Statement by a supplier form. You give it to the payer, ticking the reason withholding should not apply, for example that the supply is a private or domestic arrangement, or is done as a hobby. The payer keeps it on file and pays you in full. It is workable for one-off or small transactions, and clumsy as an ongoing arrangement.
Here is how the two paths compare in practice:
| Activity | Without an ABN | With an ABN |
|---|---|---|
| Invoicing other businesses | Payer may withhold at the top rate unless you supply a statement by a supplier | Paid in full on your invoice |
| Registering for GST | Not possible | Available (compulsory once turnover hits the $75,000 threshold) |
| Registering a business name | Not possible | Available through ASIC Connect |
| Trading under your own personal name as a sole trader | Allowed | Allowed |
| Declaring the income in your tax return | Still required if it is assessable income | Still required |
| Claiming work-related expenses against that income | Depends on whether the activity is a business, not on the ABN | Depends on whether the activity is a business, not on the ABN |
Two common misconceptions are worth clearing up. First, not having an ABN does not make the income tax-free, assessable income is assessable whether or not you hold one. Second, holding an ABN does not by itself sign you up for GST, quarterly BAS lodgements or extra tax. Those come from separate registrations and thresholds. An ABN is an identifier, and applying for one through the Australian Business Register costs nothing.
So the practical answer for most people: if you are trading with other businesses, invoicing regularly, or heading anywhere near the GST threshold, get the ABN. If you are unsure whether your side activity is a hobby or a business, that judgement depends on the facts of your own situation, the ATO publishes guidance on the distinction, and a registered tax agent can give you a view on your particular circumstances before you apply or decide not to.
Applying for an ABN is free, and the number itself doesn't cost you anything to hold. The downsides aren't fees, they're the obligations and the shift in responsibility that come with it. When you earn under an ABN, nobody is withholding tax for you, paying your super, or covering you for leave. That work moves onto your desk.
Here's what changes in practical terms:
| What you take on | What it means day to day |
|---|---|
| Your own tax | No PAYG withholding on ABN income. You need to set money aside yourself, because the tax on that income is settled when you lodge. |
| PAYG instalments | Once you've lodged a return showing business income, the ATO may put you into the instalment system, so you start pre-paying tax quarterly. |
| Your own super | No employer super guarantee on contractor income. Any contributions are yours to make and to claim. |
| Record keeping | Income and expense records, invoices, logbooks and receipts need to be kept and generally held for five years. |
| Keeping the ABN current | Changes to your details, address, contact person, main business activity, or ceasing business, need to be updated, generally within 28 days. |
| GST, once you cross the threshold | At $75,000 GST turnover (lower for some activities, and different for not-for-profits), registration becomes compulsory, which brings BAS lodgement and GST on your pricing. |
The cash flow squeeze is the one people don't see coming. Your first year of ABN income is usually taxed in arrears, you earn it, then pay the tax after you lodge. If the ATO then starts you on quarterly instalments, you can end up paying last year's bill and this year's instalments in the same period. Setting aside a portion of every payment from day one is the simplest defence.
You also give up employee protections. A genuine contractor generally has no paid annual leave, no sick leave, no notice period, and often no workers compensation cover unless they arrange their own. Public liability or professional indemnity insurance may be a client requirement or an industry licensing condition, and that's a real cost.
Some of your ABN details are public. ABN Lookup shows your ABN, entity name, entity type, GST registration status, and the state and postcode of your business location. If you're a sole trader operating in your own name from home, that's worth knowing before you register.
An ABN doesn't change what you actually are. If a business tells you to get an ABN for work that has all the hallmarks of employment, set hours, their tools, their direction, no ability to delegate, holding an ABN doesn't make you a contractor. That's sham contracting, and it's on the hiring business. Getting the ABN can leave you wearing costs and missing entitlements you were legally owed.
Business income counts elsewhere too. Net income from your ABN feeds into income tests for things like Centrelink payments, child support assessments, private health insurance rebates and study loan repayments. A good year can move those figures in ways salary alone wouldn't.
Two things that are not downsides, despite being common worries. First, an ABN doesn't cost you your tax-free threshold, as an individual you still get one threshold across all your income, whether it comes from wages, an ABN, or both. Second, an unused ABN isn't a penalty risk in itself; if there's no business activity, the ATO may simply cancel it, and you can reapply later if you need it. The real risk is the opposite: holding an ABN, earning through it, and not tracking what you owe.
On balance, the downside is administrative rather than financial. If you're genuinely running a business or contracting, the obligations come with the territory and the deductions available usually make the paperwork worth doing. If you're being pushed into an ABN for what looks like a job, that's the situation worth questioning before you register.
An ABN is not a general-purpose ID number. You are only entitled to one if you are carrying on or starting an enterprise in Australia, or you make supplies connected with Australia, or you are a company registered under the Corporations Act. If none of those apply, the ATO can refuse your application, and cancel an ABN you already hold.
The most common reason an application is knocked back is that the applicant is really an employee, or is doing something the ATO treats as a hobby rather than a business.
Situations where you generally cannot get an ABN
| Situation | Why there's no entitlement |
|---|---|
| You're an employee | Work done as an employee is excluded from the definition of an enterprise. Your wages are reported through your employer's payroll using your TFN, not an ABN. |
| An employer told you to "get an ABN" for a job that is really employment | Being asked to quote an ABN doesn't make you a contractor. If the working relationship is employment, you're not entitled to an ABN for that work. |
| Hobby or private recreational activity | Selling the odd item from a hobby, or an activity with no real commercial character, isn't an enterprise. |
| One-off private sales | Selling your own car, furniture or a household clean-out is a private transaction, not a business. |
| Volunteering | Unpaid volunteer work for a club or charity isn't your enterprise, even if the organisation itself holds an ABN. |
| Acting only as an office holder or company director | Activities carried out purely in that capacity are excluded from the enterprise definition, so directors' fees generally don't support a personal ABN. |
| No Australian connection | If you don't carry on an enterprise in Australia and don't make supplies connected with Australia, there's nothing for an Australian ABN to attach to. |
| Wanting an ABN for a non-business reason | An ABN isn't available just to open a bank account, buy at wholesale prices, get a trade discount, or satisfy a landlord or platform. |
Employee or contractor: the question to settle first
Whether you're an employee or genuinely running your own business isn't a matter of preference, and it isn't decided by what the contract is called. The ATO looks at the whole working relationship, things like whether you can delegate the work, who bears the commercial risk, whether you supply your own tools, whether you're paid for a result or for time, and whether you're free to work for others.
If your situation is borderline, use the ATO's employee/contractor decision tool before you apply, and keep a copy of the result with your records. If you think you've been pushed into an ABN arrangement for work that is really a job, the Fair Work Ombudsman handles sham contracting complaints.
Hobby or business?
There's no dollar threshold that flips a hobby into a business. The indicators the ATO weighs include whether you intend to make a profit, whether you repeat and organise the activity in a businesslike way, whether you advertise, and whether you keep records and invoice customers. Occasional sales with no profit motive usually stay a hobby. Regular, organised, profit-seeking activity usually doesn't.
Other limits worth knowing
- One ABN per entity. As a sole trader you hold a single ABN and use it across all your business activities, you don't get a second one for a second side business.
- Change of structure means a new ABN. If you move from sole trader to a company, trust or partnership, that's a different entity and needs its own ABN.
- No minimum age category. There's no separate ABN pathway for young people; the same enterprise test applies, and the ATO may ask for more detail about the business.
If your application is refused
You'll be given a refusal number and written reasons. You can supply more information about your business activity, clients, quotes, advertising, equipment, an ABN-ready business plan, and ask for the decision to be reviewed, or lodge a fresh application once you're genuinely carrying on or starting an enterprise. Don't simply reapply with the same details and hope for a different answer; the reasons given tell you what's missing.
If you hold an ABN you're no longer entitled to, cancel it. Leaving a dormant ABN active keeps lodgment obligations running and can create problems that take longer to unwind than the cancellation itself.
Holding an ABN doesn't create a separate tax or a separate tax rate. It simply identifies your business to the ATO and to the people who pay you. How you actually pay tax depends on the structure you registered the ABN under — sole trader, partnership, company or trust.
The other thing to get used to: nobody withholds tax from your ABN income the way an employer does from wages. You receive the full invoice amount and the tax bill arrives later, so the money has to be set aside as you go.
Reporting by business structure
| Structure | What gets lodged | Who pays the tax |
|---|---|---|
| Sole trader | Your individual tax return, with the business and professional items schedule completed | You, at individual marginal rates, using your own TFN |
| Partnership | A partnership tax return, plus each partner's individual return | Each partner, on their share of the net profit — the partnership itself pays none |
| Company | A company tax return, lodged under the company's own TFN | The company, at the company rate; shareholders are then taxed on dividends |
| Trust | A trust tax return, plus returns for beneficiaries | Generally the beneficiaries on distributions they receive |
The sole trader mechanics
Most new ABNs are sole traders, and this is the simplest arrangement. You don't lodge a separate business return. You report gross business income and business deductions in your individual return, and the net profit is added to any other income you have — salary, interest, rent — to work out your total taxable income.
Two consequences flow from that:
- The tax-free threshold of $18,200 applies once, across all your income combined — not separately to your ABN work.
- If you also have a job, your ABN profit stacks on top of your wages, so it is taxed at the marginal rate that applies to your total income, not the rate that applied to your salary alone.
This is why people with a side ABN alongside a salaried job often get an unexpected bill: the employer withheld tax as though the salary was all they earned.
PAYG instalments
In your first year with an ABN, you generally pay the whole year's tax in one lump when the return is assessed. After the ATO sees business income in a lodged return, it will usually enter you into the PAYG instalments system, and from then on you prepay tax in instalments — most commonly quarterly — against the current year's expected liability.
Instalments are not extra tax. They are credited against your final assessment, so you either top up a small amount or get the excess back at lodgement.
GST and BAS
GST is separate from income tax, and an ABN alone does not make you liable for it. You must register for GST once your GST turnover reaches $75,000 (a lower threshold applies to taxi, ride-sourcing and limousine drivers, who must register from the first dollar). You can also register voluntarily below the threshold.
Once registered, you add GST to your prices, claim credits on business purchases, and lodge a business activity statement — quarterly for most small businesses, with statements generally due on the 28th of the month following the quarter (the December quarter gets an extension to 28 February). If you are not registered for GST, you don't lodge a BAS unless you have another activity statement obligation such as PAYG instalments.
Key dates
- 31 October — individual and sole trader returns, if you lodge them yourself.
- Later concessional dates — available if you are on a registered tax agent's client list, but you generally need to be registered with that agent before 31 October.
- Quarterly — activity statements and PAYG instalments, if either applies to you.
What to do during the year
The reporting is much easier if the year is set up properly. Practical habits that matter:
- Open a separate bank account for business income and expenses, so the paper trail is clean.
- Put aside a portion of every payment for tax. How much depends on your total expected income, your other income and your deductions — the ATO's income tax estimator is the sensible way to work out a figure for your circumstances rather than using a rule of thumb.
- If you register for GST, hold the GST component separately too. It was never your money.
- Keep records for five years from lodgement, including invoices issued, receipts, logbooks and any apportionment calculations for items used both privately and for work.
- Issue tax invoices that show your ABN. If you don't quote an ABN, a business paying you may be required to withhold from the payment.
Superannuation and employees
As a sole trader or partner, you are not required to pay super guarantee for yourself. You can make personal contributions and may be able to claim a deduction for them if you meet the conditions and lodge a notice of intent with your fund.
If you take on employees, the obligations change substantially: you'll need to register for PAYG withholding, report wages through Single Touch Payroll, and pay super guarantee for eligible workers. Engaging other contractors can also bring reporting duties, including the taxable payments annual report in industries such as building and construction, cleaning and courier services.
If your affairs are more complex than a single stream of invoices — multiple structures, employees, or income from overseas — it is worth having a registered tax agent set up the reporting pattern in year one, because the same arrangement then runs each year.
No, there is no law that makes it an offence to earn money without an ABN. An ABN is not a licence to work. It is an identifier the ATO issues to entities carrying on an enterprise, and the obligation attaches to how you are working, not to working at all.
The practical question is which of three categories you fall into, because each has a different answer.
| Your situation | Do you need an ABN? |
|---|---|
| Employee (payer withholds tax, gives you payslips, you complete a TFN declaration) | No. Employees never need an ABN, and you should not be asked for one. |
| Carrying on an enterprise, sole trader, contractor, sub-contractor, freelancer, rideshare or delivery driver | Yes. You are entitled to one and are expected to quote it on invoices. |
| One-off or hobby activity that is not an enterprise | No, but see the "Statement by a supplier" note below. |
If you should have an ABN and don't, the consequence is withholding, not prosecution. When a business pays another business for goods or services and no ABN is quoted, the payer is required to withhold at the top rate (47% at the time of writing, confirm the current rate on ato.gov.au) and send it to the ATO. You claim it back through your tax return, but you wear the cash-flow cost in the meantime. In practice, most clients simply won't engage a contractor who can't quote an ABN.
Being told to "get an ABN" for what is really a job is a warning sign. If someone directs your hours, supplies the tools, controls how the work is done and takes no commercial risk from you, the relationship may be employment regardless of what the paperwork says. Requiring a worker to obtain an ABN to disguise employment as contracting is sham contracting, and the legal exposure sits with the engaging business, not with you. If that describes your arrangement, the Fair Work Ombudsman and the ATO both take enquiries.
For genuinely occasional income, there is a form instead. If the activity is a hobby or a private, domestic one-off and you are not carrying on an enterprise, you can give the payer a completed Statement by a supplier declaring why no ABN is quoted. The payer then doesn't have to withhold. Keep a copy for your records.
Where you can strike trouble is misuse rather than absence:
- Applying for an ABN when you are not carrying on an enterprise, the ATO can refuse the application or cancel the ABN, and can apply penalties for false statements.
- Quoting an ABN that isn't yours, or one that has been cancelled.
- Continuing to invoice on an ABN after the business has ceased and the ABN has been cancelled.
Two related obligations sit alongside this. You must be registered for GST once your business turnover reaches the $75,000 threshold, and you cannot register for GST without an ABN. You also need an ABN before you can register a business name. So even though working without an ABN isn't illegal, running a business without one quickly makes other legal obligations impossible to meet.
If you are unsure which category you're in, the ATO's guidance on whether you are carrying on an enterprise is the starting point, and a registered tax agent can give you a view on your specific arrangement.
Most of the time this isn't really a choice. Your tax file number (TFN) and your Australian business number (ABN) do different jobs, and which one applies depends on the nature of the working relationship, not on which one you'd prefer.
If you're an employee, you give your employer a TFN declaration. They withhold tax from your pay, pay super on your behalf and report it all through Single Touch Payroll. If you're genuinely running your own business, a sole trader, contractor or freelancer, you quote your ABN to clients, invoice them, and take care of your own tax and super. Everyone keeps the same TFN for life either way; an ABN sits alongside it, it never replaces it.
The two arrangements differ in who carries the admin and the risk:
| Employee (TFN) | Sole trader / contractor (ABN) | |
|---|---|---|
| Tax on your income | Withheld from each pay by your employer | Nothing withheld, you set money aside and pay at lodgement, or through PAYG instalments once the ATO puts you in the system |
| Super | Paid by your employer into your fund | Your own responsibility unless a specific arrangement says otherwise |
| Leave and entitlements | Annual leave, sick leave, notice, award or agreement conditions | None, unpaid days are unpaid |
| Insurance | Generally covered by the employer's workers compensation policy | You arrange your own cover, including public liability or professional indemnity if your work calls for it |
| Deductions | Work-related expenses you paid for yourself and weren't reimbursed for | Business expenses, which is usually a broader range, but you need the records to back them |
| Admin | Payslips arrive; you lodge one tax return | Invoicing, chasing payment, bookkeeping, a business schedule in your return, possibly GST and BAS |
A higher hourly rate on an ABN can look better than an employee rate for the same work, but they aren't comparing like with like. Before you accept ABN work, price in the things the rate now has to cover: super, leave you won't be paid for, your own insurance, tools and equipment, unpaid time spent quoting and invoicing, and the tax that isn't being taken out along the way. Whether the ABN rate comes out ahead depends entirely on the gap between the two rates and how much of that list applies to you, work it out on your own numbers rather than assuming the bigger figure wins.
The cash flow difference catches people out more than anything else. On a TFN, tax is deducted before the money hits your account. On an ABN, the full invoice amount lands in your account and the tax bill turns up later. Opening a separate account and moving a set percentage of every payment into it as it arrives is the simplest way to avoid a nasty surprise at lodgement.
An ABN genuinely suits your situation when you're operating as a business: you have or want multiple clients, you decide how the work gets done, you supply your own tools, you can subcontract or delegate, and you carry the commercial risk of fixing problems at your own cost. If none of that describes your day, an ABN probably isn't the right fit.
Be wary if a single employer directs your hours, supervises the work, provides everything you use and then asks you to get an ABN before you start. Engaging someone as a contractor when the relationship is really employment is sham contracting, and it's unlawful, it doesn't become legitimate just because you agreed to it or applied for the ABN yourself. The ATO's employee/contractor decision tool will walk you through the indicators, and the Fair Work Ombudsman covers the workplace side.
You can also run both at once, and plenty of people do, a TFN with an employer for your main job and an ABN for weekend or side work. Two things to watch. First, only claim the tax-free threshold with one employer, or too little tax gets withheld across the year. Second, your ABN income is added to your wages when your tax is worked out, so set aside enough from the side work to cover the tax on it at your combined rate rather than the rate you'd pay on the side work alone.
If you go the ABN route, check whether GST applies. Once your annual turnover reaches the registration threshold you must register and start lodging activity statements, and some industries need to register regardless of turnover. The current threshold and the registration rules are on the ATO website, confirm them before you start invoicing, because backdating GST registration and reissuing invoices is far more painful than getting it right at the outset.
If you're still unsure which applies, work it out before the first shift or the first invoice. It's much easier to set the arrangement up correctly than to unwind months of misclassified payments, unpaid super and unreported income.
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