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Australia ABN Guide

the Australian Business Number (the "ABN") for the businesses, the sole traders and the contractors. The guide covers: the ABN application process (the "how to get the ABN") — the ABN is the "11-digit number" issued by the "Australian Business Register (the ABR)" for the "business identity" and the "tax purposes"; the application is made through the "ABR website" (the "abr.gov.au") and is "free of charge"; the applicant must have the "Australian Business Number eligibility" — the "entity must be carrying on the enterprise in Australia" (the "the business activity, the trade, the profession, the vocation, or the regular activity"); the application requires the "personal details" (the "name, the address, the date of birth, the tax file number"), the "business details" (the "business structure, the business name, the industry code"), and the "tax details" (the "GST registration, the PAYG withholding"); the ABN eligibility and the requirements (the "who can get the ABN") — the eligible entities include: (a) the "sole trader" (the "individual carrying on the enterprise"), (b) the "partnership" (the "two or more individuals or the companies carrying on the enterprise"), (c) the "company" (the "registered under the Corporations Act 2001"), (d) the "trust" (the "managed by the trustee"), (e) the "superannuation fund" (the "SMSF or the APRA-regulated fund"), (f) the "government entity", (g) the "non-profit organisation", (h) the "incorporated association"; the "individual" must be the "Australian resident" or the "carrying on the enterprise in Australia through the permanent establishment"; the ABN vs ACN (the "Australian Business Number vs the Australian Company Number") — the ABN is the "business identification number" for the "tax and the business purposes" (the "issued by the ABR"); the ACN is the "company identification number" for the "corporate purposes" (the "9-digit number issued by the ASIC"); the "company" must have both the ABN and the ACN; the ABN for the company is the "ACN plus the 2-digit prefix".

ABN Obligations and the Compliance

  • ABN record keeping: The ABN holder must maintain the "accurate records" of the business activities, the income and the expenses, and the "GST records" (the "tax invoices, the receipts, the BAS records"). The records must be kept for "5 years" after the transaction. The ABN holder must notify the "ABR of any changes" (the "address, the business structure, the contact details") within "28 days".
  • ABN cancellation and the review: The ABR may "cancel the ABN" if: (a) the entity "ceases to carry on the enterprise", (b) the entity "fails to lodge the business tax returns" for the "2 years", (c) the sole trader "passes away", (d) the company is "deregistered", (e) the entity "supplies the false or the misleading information". The entity can "object" to the cancellation through the "ABR website" or the "ATO".
  • ABN lookup services: The "ABN Lookup" (the "abr.business.gov.au") is the public register for the ABN verification. The ABN Lookup shows: (a) the "entity name and the business name", (b) the "ABN status" (the "active" or the "cancelled"), (c) the "GST registration status", (d) the "entity type" (the "sole trader, the company, the trust"), (e) the "business location". The "public access" to the ABN Lookup allows the businesses to verify the "contractor details" before the payment.

For the starting the business and the business structure selection, see our Starting a Business Guide →.

ABN and the GST Registration

  • GST registration requirement: The business with the "GST turnover" (the "gross business income, excluding the GST") of "$75,000 or more" must register for the GST. The "non-profit organisation" must register if the "GST turnover is $150,000 or more". The "taxi driver" and the "ride-sourcing driver" (the "Uber, the Didi, the Ola") must register for the GST "regardless of the turnover". The "fuel retailer" must register for the GST on the "fuel sales".
  • Voluntary GST registration: The business with the "GST turnover below $75,000" can "voluntarily register for the GST". The voluntary registration allows the business to claim the "input tax credits" on the business purchases (the "reclaiming the GST on the purchases") but requires the "charging of the GST on the sales". The voluntary registration lasts for the "minimum of 12 months".
  • PAYG withholding registration: The business that "pays the employees" must register for the "PAYG withholding" through the ABN application or the "ATO online services". The business must withhold the "tax from the employee wages" at the "PAYG withholding rates" based on the "tax tables". The business registers for the "PAYG withholding" and reports the "amounts through the BAS".

For the GST registration and the GST obligations, see our GST Guide →.

ABN for the Sole Traders and the Independent Contractors

  • Sole trader ABN: The "sole trader" applies for the ABN under the "individual" entity type. The sole trader uses the "own TFN" for the income reporting. The ABN for the sole trader is "not transferred" if the business structure changes (the "the sole trader must apply for the new ABN" for the "company" or the "trust" structure). The sole trader reports the business income in the "individual tax return" at the "business schedule".
  • Independent contractor ABN: The "independent contractor" (the "freelancer, the consultant, the sub-contractor") needs the ABN to issue the "invoices" to the clients. The client may require the "ABN to process the payment" and the "no PAYG withholding" if the contractor has the "ABN and the valid ABN quotation". The contractor without the ABN is subject to the "PAYG withholding at the 47% rate" (the "no ABN withholding").
  • Employee vs contractor distinction: The ABN alone does not determine the "employment status". The ATO uses the "multifactor test" (the "common law test" — the "control, the integration, the risk, the delegation, the tools, the results") to determine if the worker is the "employee" (the "PAYG withholding, the superannuation guarantee") or the "contractor" (the "ABN, the self-lodged tax, the own super").

For the employee vs contractor rules and the multifactor test, see our Employee vs Contractor Guide →.