You need an ABN if you’re carrying on an enterprise in Australia, running a business, freelancing, contracting or doing gig work. Employees earning wages don’t need one, and neither do genuine hobbyists. In practice, almost anyone who invoices for work needs an ABN: without one, business customers are required to withhold 47% of your payment under the no-ABN withholding rules.
Whether you need an ABN comes down to one question: are you carrying on an enterprise? Here’s how the ATO draws that line, and what it means for freelancers, side hustles and anyone who sends an invoice. (Short on time? The 2-minute decision test gets you there faster.)
What is an ABN?
An ABN (Australian Business Number) is a unique 11-digit number issued by the Australian Business Register (ABR).
It’s not the same as a Tax File Number (TFN). Instead, it’s used to:
- Identify your business to the government and community
- Invoice clients and avoid higher tax withholdings (PAYG)
- Register for Goods and Services Tax (GST)
- Apply for business-related services, grants and tenders
Do you legally need an ABN?
You need an ABN if you are:
- Running or starting a business (sole trader, partnership, company or trust)
- Registering for GST, required when your annual business turnover is $75,000 or more
- Invoicing clients for goods or services (to avoid 47% PAYG withholding)
- Importing or exporting goods in the course of business
- Applying for government grants or tenders that require a business identifier
The ATO’s key test is whether you’re carrying on or starting a business, that is, with a reasonable expectation of profit and regular commercial activity.
Who doesn’t need an ABN?
You generally don’t need an ABN if you are:
- An employee, your employer handles PAYG withholding for you
- Earning money from a hobby with no real intention to make a profit
- Selling personal items online occasionally, not as a business
- Receiving passive income such as dividends, interest or rent (as an individual investor)
If your hobby evolves into a regular money-making activity with business systems, you’ll likely need an ABN at that point, our guide on hobby or business, and when a side hustle needs an ABN walks through exactly where the line sits.
Benefits of having an ABN
Beyond compliance, having an ABN gives your business credibility and flexibility:
- Professional credibility – clients and suppliers view you as legitimate
- Full invoicing rights – avoids 47% PAYG withholding by clients
- GST registration – claim GST credits on business purchases
- Access to opportunities – apply for government grants or .com.au domains
- Smoother banking – many banks require an ABN for business accounts
Do I need an ABN? Let’s compare
| Situation | ABN needed? | Why |
|---|---|---|
| Freelancing (writer, designer, tradie) | Yes | Required to invoice clients legally |
| Business turnover over $75,000 | Yes | Must register for GST |
| Selling goods or services as a side hustle | Yes | Considered running a business |
| Employee earning wages or salary | No | Employer manages PAYG tax |
| Hobby (knitting gifts, garage sales) | No | No reasonable expectation of profit |
| Applying for government grants or contracts | Yes | ABN required for eligibility |
Frequently Asked Questions
Can I run a business without an ABN?
Technically yes, but clients must withhold 47% PAYG tax from payments if you don’t quote an ABN (unless a specific exemption applies).
Does it cost money to get an ABN?
You can apply directly through the Australian Business Register (abr.gov.au), or you can engage a professional service such as ours to manage the registration process for you.
How long does it take to get an ABN?
Most applications are approved instantly online. If your eligibility needs manual review, it can take up to 28 days.
Can I have multiple ABNs?
No. You can only have one ABN per business entity (e.g. one per sole trader, company, or trust). However, a single ABN can cover multiple business activities under that entity.
When do I need to register for GST?
When your business turnover reaches $75,000 or more per year, or immediately if you provide ride-sourcing or taxi travel services (GST applies from the first dollar).
Final Thoughts
If you’re earning income as a business, not just a hobby or job, then yes. You need an ABN. It keeps you compliant with ATO rules, builds credibility and opens the door to opportunities like GST registration, grants, and business banking.
Click here to register.
Quick answers
Is it legal to work without an ABN in Australia?
If you’re an employee, yes. You never need one for wages. If you’re running an enterprise, you’re entitled to an ABN and life without one is hard: business customers must withhold 47% from your invoices, you can’t register for GST or a business name, and most platforms and suppliers won’t onboard you.
Does getting an ABN cost anything?
Applying directly through the Australian Business Register is free. Agent-lodged services charge for review and support, ours is a flat $99 inc GST, tax deductible, with a registered tax agent checking the application before lodgement.
Do hobbyists need an ABN?
No, a genuine hobby isn’t an enterprise, so there’s nothing to register. The line matters though: once you’re selling with regularity, intending to profit and operating in a business-like way, the ATO sees a business, and the ABN (and possibly GST) obligations follow.
Related guides: Do I need an ABN as a sole trader? · How much does an ABN cost? · How to apply for an ABN online
Need an ABN? Five minutes, $99.
Reviewed by registered tax agents, lodged direct to the ABR, tax deductible. Free help on 1800 546 526.