In the simplest terms, in Australia, if you want to operate as a business, you need an ABN. If you want to work as a self-employed sole trader or contractor, you need an ABN. If you have a charity, not-for-profit, incorporated (INC), proprietary (PTY), or limited-by-shares (LTD) organisation or company, it will need an ABN.

In effect, if you are going to be working as anything other than a pay-as-you-go (PAYG) employee, you'll probably need to consider getting an ABN. The Australian Government calls this "undertaking a business activity". And it covers almost everything that isn't direct employment.

So, what is an ABN?

An Australian Business Number or ABN is an individual identification number for a business or other registered organisation from the Australian Government agency, the Australian Business Register (ABR).

An ABN helps to identify a business or organisation - or individual in the case of a sole trader - and allows government departments, other businesses, and individuals who trade with you (your customers) to identify transactions that involve a particular business. This helps them to define whether something they purchased is tax-deductible, and helps them to categorise deductions.

Whatever your business structure is, you'll likely need an ABN.

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How do I get an ABN and how much does it cost?

Because getting and having an ABN is something the Australian Government wants you to do, it's both free and easy to get one.

The best place to start is the Australian Business Register. That's the Australian Government agency responsible for registering businesses and for providing ABNs. They also record the details of businesses and the ABNs registered to them, and provide those details on a publicly accessible (and searchable) database. That means anyone can check whether yours is a real business and whether or not you have an ABN.

Of course, registering for an ABN is free.

The ABR site includes a range of information related to ABN registration and there are resources for sole traders, businesses and other organisations that need assistance with their ABN registration.

I already have a TFN, do I still need an ABN?

A tax file number (TFN) is what the Australian Taxation Office (ATO) uses to track the pay and tax of individual taxpayers. It's important to know that you can (and probably should) have both if you're going to be self-employed. If you file an individual tax return as an ABN holder, you'll still use your TFN to be identified.

Having a TFN doesn't mean you don't need an ABN, and having an ABN doesn't mean you won't need a TFN. In most cases, you'll need both. The difference is that you usually only have one TFN, whereas you could end up with multiple ABNs (if you run multiple businesses).

Most Australians get a TFN when they start their first job; their employer helps them to register for a provisional TFN. If you don't have one yet, you can register for one with the ATO, through the MyGov portal.

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How should I use my ABN?

Your ABN is used for a wide range of interactions and transactions with the Australian Government, and with other individuals and businesses (customers and entities your business is a customer of). Primarily, it allows for GST registration so that you can submit business activity statements on a quarterly basis.

Income and expenses associated with your ABN are used to calculate your tax obligations, GST (goods and services tax), GST credits, fuel tax credits, deductions for business expenses, and other tax purposes.

Depending on your company structure (for example, if yours is a business entity) annual turnover associated with your ABN may also be used to calculate public liability insurance premiums and other business insurance.

Your ABN is also a unique company identifier that allows you to access a range of government websites and government programs like energy grant credits and income reporting systems with the ATO. A number of eligibility tools also use your ABN to identify you and track your applications.
Do sole traders need an ABN?

Generally, yes. A sole trader is a self-employed person who completes work for multiple clients. The ATO and ABR have methods in place to prevent people who would normally be considered “employees” from registering as a sole trader with an ABN. That is because historically, some businesses have tried to avoid paying tax, superannuation, workers compensation insurance and some benefits by hiring sole traders as contractors rather than hiring them as employees. But legitimate sole traders - those who are contracted to multiple businesses or clients and have no one specific employer - should find it very easy to register for an ABN. Sole traders will need an ABN if they want to issue tax invoices to client businesses or individuals, just like any other Australian business.

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What else can I use my ABN for?

Other than including your ABN on your invoice template and invoices, so that you can track your commercial activities, income and expenses, and complete your taxes at the end of the financial year, there are a few things you can do with your ABN.

It's important you have an ABN if you're going to apply for business registration with the Australian Securities and Investment Commission (ASIC). It used to be the case that business names were registered with State Government authorities (like Fair Trading in NSW). But this process is now managed by the Australian Government.

If you're a sole trader you can use your personal name and your ABN as your business identifiers and your personal name can be your "trading name". But if you want to start a business with a specific name (that isn't just your personal name), you'll need to register that name. And you'll need an ABN to register that name.

Note: Always google the name you've picked to make sure someone else isn't using it already. And once you've registered your business name, you should also register your business' URL (web address), even if you don't plan on having a website straight away. That's because registering a business name doesn't give you exclusive rights to things associated with that name (like a web address).

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Are there any other benefits to having an ABN?

In some industries you can associate business licences with a particular ABN, which means authorisations, checks, and other regulatory compliance activities can be conducted quickly and easily.

Some companies have discounts for ABN holders. These include trade supply businesses like PaintAccess and motor vehicle dealerships that offer discounts on trade vehicles to ABN holders. You may have seen these discounts referenced in advertising and you should ask any business that offers a trade discount on that basis.

Having an ABN can also make you eligible for other trade discount programs that require an ABN for registration. Bunnings, for example, has a trade discount program that requires an ABN for registration.

Business lawyers and accountants (who can also help you manage your business registrations) might have information about other benefits available to you as an ABN holder.

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Do I need an ABN to complete tasks on BorisDoes?

Generally, yes. Most individual BorisDoes Taskers are considered sole traders; they complete tasks and earn income using their ABN and pay taxes on that income after deducting any expenses. Most Business account holders on BorisDoes are the owners or managers of a Business that completes tasks under their company name. Those businesses should also have an ABN.

On BorisDoes, if you're a Tasker or a Business you can register your ABN and have it displayed on your profile, which means Customers can quickly and easily check that yours is a legitimate business, and they can quickly obtain your ABN for accounting purposes, or to manage their own business finances. BorisDoes Customers know that genuine businesses have ABNs and BorisDoes maintains this feature to reassure Customers. Ensure Customers know that yours is a real business by including your ABN in your BorisDoes Business account profile.

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Conclusion

In Australia, if you're doing business, you likely need an Australian Business Number. Luckily, it's quick and easy to get one. If you're already a BorisDoes Tasker or Business, provide your ABN and reassure Customers you're a bona fide business. If you're not already registered with BorisDoes, what are you waiting for?