Australian Business Number (ABN)
A unique 11-digit number identifying a business entity to government and the community.
An Australian Business Number (ABN) is an 11-digit identifier issued by the Australian Business Register (ABR) to businesses operating in Australia. You need an ABN if you carry on a business, regardless of whether you are a sole trader, partnership, company, or trust. It is used on invoices, when dealing with other businesses, and when registering for GST.
If you provide services without an ABN and the payer reasonably expects you should have one, they are required to withhold 47% from your payment (the "no-ABN withholding" rule). Having an ABN allows you to issue proper tax invoices, claim GST credits (if GST-registered), and interact with government agencies efficiently.
You can register for an ABN for free through the ABR website (abr.gov.au). You'll need your TFN and details about your business structure. Be aware that having an ABN doesn't automatically mean you are running a business for tax purposes — the ATO can cancel ABNs if it determines no business activity is being conducted.
How it works
An Australian Business Number is an eleven-digit identifier issued by the Australian Business Register to any entity carrying on a business in Australia, whether that's a sole trader, partnership, company, or trust. It's separate from a TFN — a TFN identifies you as a taxpayer, while an ABN identifies your business to other businesses, government agencies, and, once you're GST-registered, the GST system. Registration through the ABR website is free, and you'll need your TFN and some basic details about your business structure to apply.
In practice, you quote your ABN on every invoice you issue, which is what lets other businesses treat the payment as a legitimate business transaction rather than employment income. If you're registered for GST, the same number is what ties your GST credits and obligations back to your business identity when you lodge activity statements. Many software platforms and marketplaces also require a valid ABN before they'll process payments to you as a supplier.
The trap for new sole traders and gig workers is not having one when a payer asks: if a payer reasonably expects you to have quoted an ABN and you haven't, they're required to withhold 47% of the payment under the no-ABN withholding rule, rather than paying you in full. Having an ABN also doesn't automatically confirm you're 'in business' for tax purposes — the ATO can and does cancel ABNs it decides were issued to hobbyists or people with no ongoing business activity, so the number alone isn't proof either way.
Example: the cost of not quoting an ABN
You do some freelance design work and invoice a client $2,000, but you haven't registered for an ABN yet and don't quote one on the invoice. Because the client reasonably expects a supplier in your position to have an ABN, they're required to apply no-ABN withholding at 47% rather than paying the invoice in full.
That means $940 (47% of $2,000) is withheld and sent to the ATO on your behalf, and you receive only $1,060 into your account instead of the full $2,000. You can claim the withheld amount back as a credit when you lodge your tax return, but you're out of pocket in the meantime — registering for a free ABN before invoicing avoids the withholding altogether.
Related Terms
ATO (Australian Taxation Office)
The government agency responsible for administering Australia's tax and superannuation systems.
Tax File Number (TFN)
A unique 9-digit number issued by the ATO to identify individuals and organisations for tax purposes.
Goods and Services Tax (GST)
A 10% broad-based consumption tax applied to most goods, services, and other items sold or consumed in Australia.
Business Activity Statement (BAS)
A form lodged with the ATO to report and pay GST, PAYG withholding, PAYG instalments, and other business tax obligations.
Sole Trader
An individual who runs a business in their own name, reporting business income and expenses in their personal tax return.