It is asking what your business actually does, in plain words, not what industry you are in. "Residential lawn mowing and garden maintenance" is a good answer. "Services" is not. The description is how the ABR sees your entitlement to an ABN, so a vague one is a common reason an application stops being automatic and goes to a person to review.
What a good answer looks like
Describe the activity you will be paid for, specifically enough that a stranger could picture it.
| Too vague | Better |
|---|---|
| Consulting | Marketing strategy consulting for small retail businesses |
| Services | Mobile dog grooming |
| Online business | Online retail of handmade candles |
| Delivery | Food delivery services for online platforms |
| Trades | Domestic electrical installation and repairs |
| Investing | Commercial property leasing |
Two or three plain words plus what it is for is usually enough. You are not writing a business plan and there are no marks for length.
Why does it matter what I put?
Three reasons, in the order they will affect you.
- It is an entitlement signal. An ABN is for carrying on or starting an enterprise. A description that could equally be a hobby, or that reads like employment, gives the ABR a reason to look closer.
- It decides whether you get the number now or in a few weeks. A complete, sensible application usually issues immediately. One that needs a human to interpret goes into a queue.
- It follows you. The description sits on your ABR record and feeds the industry classification attached to your ABN.
What it does not do is lock you in. You are not restricted to the activity you described, and you do not need a new ABN when the work changes. You update the record.
The descriptions that cause trouble
- Anything that reads like a job. "Labouring", "trade assistant" or "admin work" describe employment. You are not entitled to an ABN for work you do as an employee, even if the person paying you calls it contracting.
- Anything that reads like a hobby. "Craft", "photography for fun", "selling bits and pieces". If the activity is genuinely a hobby you are not entitled, and if it is a business, say so in the description.
- Blank, or a single generic word. "Business", "sales", "misc". These are the ones that stall.
- Copying a friend's. A description that does not match the income later reported under the ABN is a mismatch waiting to be noticed.
If you have not started trading yet
You can still apply, as long as you have taken steps to commence. The ABR lists what it counts as commencement activities: advertising or setting up a social media account or website, buying business cards or stationery, obtaining licences or insurance, leasing or buying premises, equipment or stock, issuing quotes or bidding for work, consulting an adviser, applying for finance, or buying a business.
You do not need to have done all of them, but you should have done some and be able to show it if asked. Describe the activity you are setting up, and use the date you started taking those steps.
Changing it later
Update the ABR record rather than applying again. A second application does not give you a second ABN, and reapplying after a refusal or cancellation is one of the things that can trigger an entitlement review.
Common questions
What does "nature of your activity" mean on the ABN application?
It is asking for a plain description of what your business does, not an industry code and not a business plan. Something like "residential lawn mowing and garden maintenance" or "online retail of handmade candles" is the right level of detail.
What happens if I put something too vague?
The application is more likely to be held for manual review instead of issuing immediately, because a person has to work out whether you are entitled. A vague description can also read like a hobby or like employment, neither of which entitles you to an ABN.
Am I locked into the activity I describe?
No. You can do other work under the same ABN and you can change what your business does. Update your details on the ABR record so it reflects the current activity, rather than applying for a second ABN.
Can I apply before I have started trading?
Yes, if you have taken steps to commence. The ABR counts things like advertising, setting up a website, buying stock or equipment, obtaining insurance or licences, issuing quotes, or applying for finance. Describe the activity you are setting up and be able to show what you have done.
Should I use my industry code instead?
No. Write it in ordinary words. The application asks what you do; the classification is worked out from your answer.
Can I list more than one activity?
Yes. One ABN covers everything you do as a sole trader, so describe the main activity and mention the others. See can you have more than one ABN.
Want it checked before it goes in? $99.
We review the activity description and your entitlement, then lodge it. Free help on 1800 546 526.