Registration
Australian Business Number (ABN)
An Australian Business Number is a unique 11-digit identifier for businesses dealing with the ATO and other government bodies, and it is needed to register for GST and avoid withholding on payments.
An Australian Business Number, or ABN, is an 11-digit number that identifies your business to the government and to other businesses. It is issued through the Australian Business Register. You can apply for an ABN yourself directly with the government at no cost, and you generally do not need to pay a third-party company to do it. Sole traders, partnerships, companies, trusts and other entities can all hold ABNs.
To be entitled to an ABN you must be carrying on an enterprise in Australia, or making supplies connected with Australia. A hobby or casual activity generally does not qualify. The application asks you about your structure, your activity and your contact details. For a sole trader the ABN is linked to you personally, while a company has its own ABN separate from its directors.
The ABN is used in many everyday ways. You show it on your invoices and quotes, and customers use it to check who they are dealing with. It allows you to register for GST, since an ABN is required first. And it is the means by which businesses avoid a withholding on payments they receive. If you do not quote an ABN on an invoice to another business, that business may be required to withhold tax from the payment at the top rate, which can be a nasty surprise.
An ABN is not the same as GST registration. Having an ABN does not mean you charge GST, and you can have an ABN while below the threshold and unregistered. Equally, you should not add GST to your prices simply because you hold an ABN. You need to be registered for GST for that, which is a separate application and decision.
The ABN is also separate from your tax file number. A TFN identifies you as a taxpayer for income tax and is private, whereas an ABN identifies a business and is public. You should protect your TFN, but you can safely share your ABN, and it appears on a public register.
You must keep your ABN details up to date. If your address, structure or activity changes, update the Australian Business Register. If you close your business, cancel the ABN, since a business that no longer operates should not remain registered. Failing to keep details current can cause missed ATO notices and problems with customers verifying your information.
This is general information only. For help choosing a structure or deciding whether you qualify for an ABN, speak to the ATO or a registered tax professional.
Worked example
Isla starts a mobile pet grooming business as a sole trader and applies for an ABN online for free. She puts the ABN on her invoices. She charges $90 per groom and her annual turnover is expected to be about $45,000, so she is below the GST threshold and does not register for GST. Her invoices show the ABN but no GST, and customers pay $90 each.
Practical tips
- Apply for your ABN directly through the official government process. You do not need to pay a third party.
- Put your ABN on invoices to other businesses so they do not need to withhold from your payment.
- Do not confuse your ABN with GST registration or with your private tax file number.