Get an ABN if you’re starting any activity where you’ll invoice for goods or services, freelancing, contracting, gig work or a business. Skip it if you’re an employee or a genuine hobbyist. The deciding test: will anyone pay you against an invoice? If yes, you need one, payers must withhold 47% from invoices without an ABN.
The fastest way to decide: will anyone pay you against an invoice? If yes, you need an ABN. Below: what happens without one, what you get with one, and what it commits you to. (Want the long-form version with every edge case? That’s the complete guide.)
What happens if I don't register for an ABN?
The ABN system is designed to make it difficult for those who do not have an ABN and attempt to operate a business. If you do not register for an ABN, you could risk the withholding of 47% of the payment amounts made to you by other businesses for your services. This could increase or decrease, depending on the highest rate of tax.
What benefits do I get for registering?
Registering for an ABN allows you to access a range of benefits that will make running your business easier. Firstly, you will be able to register a business name, so you can operate under a registered, unique name.
Secondly, you can register for GST. This has many advantages, including claiming GST tax credits on business operation costs, potentially improving your bottom line.
Finally, you can register a .com.au domain. A .com.au domain builds trust between you and your customers, adds weight to your brand, and helps your business appear in local online search.
What obligations come with an ABN?
Once you obtain an ABN, there are a few obligations, all relatively simple and a normal part of operating a business:
- Every invoice must clearly show your ABN, address, contact details, name and business name.
- You become responsible for paying the appropriate taxes to the ATO each year, your own income tax, GST (only if registered), and any other business taxes that apply.
- If your annual turnover reaches $75,000, you must register for GST, easily included in your ABN application.
- You'll want a separate business bank account, keeping business finances independent from personal ones.
Ride share drivers
Ride share drivers, just like taxi drivers, are required to be registered for GST regardless of turnover. That means you need an ABN to operate. Whether you drive for Uber, DiDi or Ola, you must be registered for an ABN and GST, and you handle your own tax and lodgement obligations, because you're not an employee of these companies. Our ride-share ABN form sets up both in one pass.
Quick answers
When should I NOT get an ABN?
When you’re an employee (wages never need one), a genuine hobbyist, or you haven’t actually started, and won’t soon. Entitlement to an ABN requires that you’re carrying on or starting an enterprise; applications with no real activity behind them can be refused or later cancelled.
Can I get an ABN before my business makes any money?
Yes. You don’t need revenue, you need to have commenced: things like setting up premises or a website, quoting for work, buying stock or equipment. If you can point to steps like these, you’re entitled to the ABN now.
What is no-ABN withholding?
If you invoice a business without quoting an ABN, that business is generally required to withhold 47% of the payment and send it to the ATO. You can credit it back at tax time, but your cash flow takes the hit, which is why almost everyone invoicing gets the ABN first.
Related guides: Do I need an ABN in Australia? The full picture · How much does an ABN cost? · How to apply for an ABN online
The answer was probably yes. Five minutes, $99.
Reviewed by registered tax agents, lodged direct to the ABR, tax deductible. Still unsure? Call 1800 546 526, the advice is free.