PAYG
Tax file number (TFN)
A tax file number is a unique nine-digit number issued by the ATO to an individual or organisation to identify them in the tax and super systems. It is not the same as an ABN.
A tax file number, or TFN, is a personal reference number issued by the Australian Taxation Office to individuals, companies, partnerships, trusts and super funds. It is used to link your tax and superannuation records so that the ATO can match the income reported by employers, banks and other payers with the income in your tax return. Each TFN is unique to the taxpayer, and you keep the same number for life.
Applying for a TFN is free. Individuals can apply through the ATO's online process or in person, and will need to prove their identity. Businesses structured as companies, trusts or partnerships apply separately for their own TFN, which is different from the TFN of the people who run them. A sole trader uses their personal TFN for income tax, but also has an ABN for business dealings. A TFN is not an ABN and the two are never interchangeable.
You are not legally required to give your TFN to an employer, bank or super fund, but there are consequences if you do not. If an employer does not receive a TFN declaration with your TFN, they must withhold tax from your pay at the highest marginal rate plus Medicare levy until it is provided. Banks may withhold tax from interest if no TFN or exemption is given. Super funds may be unable to accept some contributions, and you may be unable to consolidate your accounts.
Privacy rules around TFNs are strict. Only certain organisations are allowed to ask for it, and they may use it only for specific purposes related to tax, super and some government benefits. Businesses that collect TFNs from employees must store them securely and must not use them for general identification. Never publish your TFN on a website, an invoice or a social media post, and be wary of unexpected requests by phone or email, which are often scams.
TFNs do not have a direct effect on GST, since GST registration depends on the ABN and the GST turnover test. However, your TFN is central to the PAYG system, because it is the identifier on the TFN declaration, the Single Touch Payroll report and the end-of-year income statement. A business owner needs to understand the difference between the TFN for income tax and the ABN used on invoices and the BAS.
A common mistake is to quote a TFN on an invoice where an ABN is needed, which exposes sensitive data and does not satisfy the tax invoice requirements. Another is assuming that a company can use the director's TFN. It cannot, because the company is a separate legal entity with its own TFN.
This is general information only, so check your own circumstances with the ATO or a registered tax professional.
Worked example
Priya starts a new job and gives her employer a TFN declaration with her nine-digit TFN. Her fortnightly gross pay is $2,400. Because the TFN was provided and she claimed the tax-free threshold, her employer uses the ordinary resident withholding schedule. Had she not supplied her TFN, the employer would have had to withhold at the highest marginal rate plus Medicare levy on the full $2,400, leaving her with far less take-home pay.
Practical tips
- Keep your TFN private and only give it to your employer, bank, super fund or the ATO. Never put it on a public invoice.
- If you start a business structure such as a company or trust, apply for a separate TFN for that entity rather than using your own.
- If you lose your TFN, you can find it on your notice of assessment, your income statement or by logging in through myGov linked to the ATO.